FULLTEXT DEL 2 AV 4
Årsredovisning 2025
MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
56
INFORMATION OF THE MANAGEMENT BOARD OF ARCTIC PAPER S.A. ON THE SELECTION OF THE
AUDITING COMPANY
Based on the statement of the Supervisory Board of Arctic Paper S.A. on the selection of the auditing firm to audit
the annual consolidated financial statements of the Arctic Paper Group and the annual separate financial
statements of the Company for the financial year ended on 31 December 2025 in accordance with the regulations
and on the basis of the statement received from PricewaterhouseCoopers Polska spółka z ograniczoną
odpowiedzialnością Audyt sp.k, it was decided to select PricewaterhouseCoopers Polska Spółka z ograniczoną
odpowiedzialnością Audyt Sp.k. as the auditor of the Company and the Arctic Paper S.A. Group to audit the
financial statements for 2025 and 2026.
The Management Board of the Company informs that the selection of the auditing firm by the Supervisory Board
took place in accordance with the regulations and the “Policy and procedure for the selection of the audit firm for
the statutory and voluntary audit of the consolidated and separate financial statements of Arctic Paper S.A. with its
registered office in Kostrzyn nad Odrą”.
The audit firm and members of the audit team complied with the criteria to issue an impartial and independent
report on the audit of the annual consolidated financial statements of the Company for the financial year ended on
31 December 2025, in compliance with the applicable laws, professional standards, and the principles of
professional conduct.
The Management Board of the Company also informs that the applicable laws with regard to a change of the
audit firm and the key statutory auditor, as well as mandatory cooling-off periods have been complied with. The
Arctic Paper Group has a policy relating to the selection of the auditing company and a policy of the provision of
services that are not an audit by the audit firm, entities related to the audit firm or a member of its group, including
services that are not covered with the ban on being provided by audit firms.
Signatures of the Members of the Management Board
Position First and last name Date Signature
President of the Management Board
CEO
Michał Jarczyński 21 April 2026 signed with a qualified
electronic signature
Member of the Management Board
CFO
Katarzyna Wojtkowiak 21 April 2026 signed with a qualified
electronic signature
Member of the Management Board
Vice-President for Sales and Marketing
Fabian Langenskiöld 21 April 2026 signed with a qualified
electronic signature
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Statements of the Management Board
ACCURACY AND RELIABILITY OF THE PRESENTED REPORTS
Members of the Management Board of Arctic Paper S.A. represent that to the best of their knowledge:
● The consolidated financial statements of the Arctic Paper Group for the year ended on 31 December 2025 and
the comparable data were prepared in compliance with the applicable accounting principles and they present
fairly the financial position of the Capital Group and its financial result for 2025 in a true, reliable and clear
manner.
● The Management Board’s Report from operations of the Arctic Paper Group in 2025 contains a true image of
the development, achievements and condition of the Arctic Paper Group, including a description of core hazards
and risks.
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MANAGEMENT BOARD’S
REPORT FOR 2025
OF ARCTIC PAPER SA
Sustainability
reporting
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Sustainability reporting
1. GENERAL INFORMATION
ESRS 2 General disclosures
BP-1 General basis for the preparation of the Sustainability Statement
[BP-1, 3, 5a] This Sustainability Statement applies to the Arctic Paper S.A. Group (the “Group”). The statement
covers the period from 1 January 2025 to 31 December 2025. Pursuant to Act of 6 December 2024 amending the
Accounting Act, the Act on Statutory Auditors, Audit Firms and Public Supervision (Journal of Laws of 2024, item
1863), Arctic Paper S.A. has prepared a Sustainability Statement for the Arctic Paper S.A. Group for the year
ending 31 December 2025 in accordance with the European Sustainability Reporting Standards (ESRS) as
endorsed by Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive
2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards.
[BP-1, 5bi] The Company has included a Sustainability Statement as part of the Consolidated Management Report
on the Operations of the Arctic Paper S.A. Group. The Sustainability Statement has been prepared in consolidated
form and has a scope of consolidation consistent with the Consolidated Financial Statements of the Arctic Paper
S.A. Group for 2025.
[BP-1, 5bii] The full list of companies covered by the Sustainability Statement can be found on page 4. The
Arctic Paper S.A. Group’s consolidated financial report for 2025.
[BP-1,5c] The Sustainability Statement applies to the upstream and downstream value chain including suppliers
and customers of the Arctic Paper S.A. Group. The Company has taken into account in the prepared Statement the
material impacts, risks and opportunities associated with direct and indirect business relationships in the value
chain.
[BP-1, 5d] The option to omit specific information relating to intellectual property, know-how or innovation results
has not been exercised in accordance with ESRS 1 Section 7.7 “Classified and sensitive information and
information on intellectual property, know-how or innovation results”.
[BP-1, 5e] An exception allowing for the omission of disclosure of impending events or matters during
negotiations for companies based in an EU Member State has also not been applied.
BP-2 Disclosures in relation to special circumstances
[BP-2, 6, 9] The Sustainability Statement of the Arctic Paper Group uses the definitions of short-, medium- and
long-term time horizons in accordance with section 6.4 of ESRS 1. The exception are the analyses of climate risks
carried out, where a 10-year horizon was adopted for the long-term time perspective (described in more detail in
the SBM-3 indicator for ESRS E1 Climate change).
[BP-2, 10, 11, 12] The figures presented in this Statement are derived from internal sources. The exception to
this is the calculation of GHG emissions, which is based on both own and external sources, as described in the
Statement in section E1-6 Gross Scope 1, 2 and 3 GHG emissions and total GHG emissions. The Group does not
identify quantitative metrics and amounts in this Statement that are subject to a high level of measurement
uncertainty, other than those resulting from the estimation of value chain emissions, i.e. Scope 3 greenhouse gas
(GHG) emissions.
[BP-2, 13, 14] During the preparation of the 2025 Sustainability Statement, an inaccuracy was identified in the
reporting of wastewater discharges for the previous reporting period. The inaccuracy resulted from an incorrect
reference to a formula in an Excel file. In the item regarding Arctic Paper Kostrzyn, instead of the value referring to
the discharge of treated wastewater to the river, data from the previous year regarding the category "sludge from
wastewater treatment plants" was used.
Consequently, the volume of wastewater discharged at the Kostrzyn plant and at the Group level was
inadequately reported. Furthermore, the reported water discharges did not include the volume of uncontaminated
cooling water discharged to the river. The corrected data was included in Disclosure E3-4.
Additionally, an error was identified in the presentation of data on the quantities of hazardous substances for the
previous reporting period. The inaccuracy resulted from an incorrect assignment of data to specific hazard classes
and discrepancies in the aggregation of volumes in the table, which resulted in the distortion of some totals. After
verifying the source data, corrections were made to the assigned data and calculations, and the corrected values
were presented in the updated Disclosure E2-5.
Furthermore, due to the acquisition of more precise emission factors for purchased chemical raw materials, the
Arctic Paper Group changed its methodology for calculating greenhouse gas emissions within Scope 3. This
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change applies to calcium carbonate, for which an emission factor was applied that better reflects the actual
production process. The corrected values are included in Disclosure E1-6.
[BP-2, 15] The Arctic Paper Group does not have any other legislation in place that requires the company to
disclose sustainability information or generally accepted sustainability reporting standards and frameworks
[BP-2, 16] The Arctic Paper Group does not use incorporation by reference in this Statement.
[BP-2, 17] During the reporting period, the Arctic Paper Group exercised the option to voluntarily omit
disclosures on the basis of the “List of phased-in disclosure requirements” (Appendix C in ESRS 1) and the
Commission Delegated Regulation (EU) 2025/1416 of 11 July 2025 amending Delegated Regulation (EU)
2023/2772 as regards the deferral of the date of application of disclosure requirements for certain companies (the
so-called “Quick fix”):
Disclosure requirement
Full name of the requirement for which the omission of information has been
used
ESRS E1, E1-9 Anticipated financial impacts from material physical and transition risks and
climate-related opportunities
ESRS E2, E2-6 Potential financial effects from pollution-related impacts, risks and
opportunities
ESRS E3, E3-5 Anticipated financial effects from impacts, risks and opportunities associated
with water and marine resources
ESRS E4 All disclosures relating to ESRS standard E4
ESRS E5, E5-6 Anticipated financial effects from impacts, risks and opportunities associated
with resource use and the circular economy
ESRS S1, S1-7 Characteristics of non-employees working for the undertaking
ESRS S1, S1-8 Scope of collective bargaining and social dialogue
ESRS S1, S1-11 Social protection
ESRS S1, S1-12 Percentage of employees with disabilities
ESRS S1, S1-13 Training and skills development
ESRS S1, S1-15 Work-life balance
ESRS S2 All disclosures relating to ESRS standard S2
ESRS S3 All disclosures relating to ESRS standard S3
ESRS S4 All disclosures relating to ESRS standard S4
[BP-2, 17] Background information on the topics for which information omission was used in 2025:
ESRS E4: The topic of biodiversity is linked to the Arctic Paper Group’s business model through its reliance on key
raw materials, particularly wood and water, whose availability and quality depend on the health of ecosystems. The
sourcing of wood for pulp production is from certified suppliers (FSC or PEFC) and from sustainably managed
forests, which reduces the adverse impact on biodiversity. Biodiversity issues are not currently directly linked to the
Group’s strategy but are of significant operational importance. The potential impact of activities on ecosystems can
arise from GHG emissions and air, water and soil pollution, as well as from the use of natural resources. The Group
undertakes actions including optimising raw material consumption, identifying key ecosystem services and
monitoring the supply chain. The Arctic Paper Group has not adopted a separate policy related to biodiversity and
ecosystems. The strategy adopted by the organisation is to minimise the environmental impact, which is governed
by the Environmental Policy and the Sustainability Policies, among others. The Arctic Paper Group’s biodiversity
goal is to source pulp from suppliers that are 100% FSC or PEFC certified.
ESRS S2: The topic related to people doing work in the value chain is linked to the Arctic Paper Group’s business
model through the dependence of maintaining the continuity of production operations on regular supplies of raw
materials and the work of people involved in the supply chain. Ensuring that the operations of raw material and
service suppliers comply with the law, including human rights, is directly relevant to the continuity of supply of
critical raw materials. The Group regularly communicates, assesses and monitors suppliers for compliance with
legal requirements and ethical standards. Part of this effort is the obligation to sign up to the Arctic Paper Group
Code of Conduct for the value chain, covering social, human rights and environmental issues, among others.
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Policies related to employees in the value chain in place in the Arctic Paper Group and their thematic scope:
• the Arctic Paper Group Value Chain Code of Conduct – the Group’s core principles of conduct, ethics and
values;
• Whistleblowing and Whistleblower Protection Policy – an anonymous whistleblowing service.
• The policies related to employees in the value chain in place at the Rottneros AB Group cover the following
topics:
• Code of Conduct – a description of the key principles and values of Rottneros AB;
• Supplier code of ethics – business ethics of suppliers, description of conduct and behaviour when working
with suppliers;
• Whistleblowing and Whistleblower Protection Policy – an anonymous whistleblowing service.
These actions support conduct in line with the Group’s values throughout the value chain. Non-compliance by
suppliers can lead to disruption of supply and increased costs due to the need to source alternative partners.
Responsible supply chain management strengthens operational stability and reduces reputational risks. The Arctic
Paper Group has not adopted quantitative targets related to people working in the value chain.
ESRS S3: The topic related to affected communities is linked to the Arctic Paper Group’s business model through
the nature of its manufacturing operations and the Group’s role as a significant employer in the regions in which it
operates. Relationships with local communities are of operational and reputational importance, supporting conduct
in line with the Group’s values. Noise generation is a direct result of the nature of the production processes and
represents a material impact on the local environment. Noise abatement may require decisions on changes to
production processes or the implementation of mitigating measures. In 2025, the Kostrzyn plant carried out
investments to reduce noise – installation of acoustic protection in the form of noise-reducing curtains and noise
attenuators at four noise emission sources. The measurement carried out did not reveal any noise in excess of the
standards. Maintaining positive relationships with local stakeholders promotes operational stability and reduces
potential social risks. The Arctic Paper Group has not adopted a separate policy related to affected communities,
but references to them can be found in other Group policies such as the Arctic Paper Group Value Chain Code of
Conduct and the Code of Conduct for the Rottneros Group. The Arctic Paper Group has not adopted quantitative
targets related to affected communities.
ESRS S4: The consumer and end-user topic (focusing on safety and the impact of the products offered) is linked to
the Arctic Paper Group’s “4P” strategy (described in more detail in subsection SBM-1) across all its pillars. Actions
concerning the certification of raw materials, the reduction of the environmental footprint, resulting from the various
pillars of the strategy translate into an increase in the offer to consumers of sustainable products responding to
market needs and consumer expectations. Paper production is based on the use of chemicals that can be
potentially hazardous and affect the health of consumers. This impact is linked to the business model, and the use
of these substances is strictly controlled during production in accordance with the applicable standards and
regulations. It is not ruled out that the strategy will in future include objectives to minimise the use of potentially
hazardous substances by investing in safe alternatives and risk management systems. The Arctic Paper Group has
not adopted separate policies or quantitative targets related to consumers and end-users.
GOV-1 Role of administrative, management and supervisory bodies
[GOV-1, 21] The Arctic Paper Group’s Management Board has a key operational and decision-making role in the
Company’s strategy and operations, taking into account environmental, social responsibility and corporate
governance issues. The Management Board of the Group consists of three members elected by the Supervisory
Board for a joint three-year term. The Management Board consists of the Managing Director, the Chief Financial
Officer and the Chief Sales Officer. As at 31 December 2025, the Management Board of Arctic Paper S.A.
consisted of 2 men and 1 woman.
[GOV -1, 21 a, d] Table – Gender diversity in the structure of governing bodies
Miernik 2025 2024
Total count of Management Board 3 3
Percentage of women on the Management Board 33% 33%
Percentage of men on the Management Board 66% 66%
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[GOV-1, 21c] At 31 December 2025, the Management Board of the Arctic Paper Group comprises:
Michał Jarczyński
President of the Management Board and CEO, General Director
He directs and supervises the activities of the management area.
From 2008 to 2013, Mr Michał Jarczyński served as President of the
Management Board and General Director of Arctic Paper S.A. He
obtained the title of mechanical engineer from the Poznań University of
Technology; he also completed postgraduate studies in finance and
controlling at the Poznań University of Economics. Mr Michał Jarczyński
has held numerous managerial positions in Polish industry, most recently
as CEO of Radpol S.A., a Polish technology company listed on the WSE.
He has more than 15 years’ experience in the paper industry.
Katarzyna Wojtkowiak
Member of the Management Board and CFO, Chief Financial Officer
She directs and supervises the activities of the financial area.
Ms Katarzyna Wojtkowiak has many years of experience in positions in
finance departments. She has been with the Arctic Paper Group for more
than 11 years, where she served as Chief Accountant and Group
Treasury. Ms Katarzyna Wojtkowiak graduated from the Poznań
University of Economics with a specialisation in Capital Investments and
Financial Strategies of Enterprises; she is also a certified auditor and a
member of the Association of Chartered Certified Accountants (ACCA)
Fabian Langenskiöld
Member of the Management Board and Vice-President of Sales and
Marketing at Arctic Paper
He directs and supervises the company’s sales and marketing activities.
Mr Fabian Langenskiöld joined Arctic Paper in 2019 and serves as Vice-
President of Sales and Marketing. He holds a master’s degree in economic
sciences from the Hanken School of Economics in Helsinki, Finland. He has
more than 25 years of experience in marketing and sales in the paper
industry. Previously, he held important positions at companies such as
Stora Enso and Shandong Chenming Paper Holdings. In his current role, he
is responsible for leading the sales and marketing activities at Arctic Paper
Group.
The Management Board of the Group Paper Group is supported by the managing directors of the individual paper
and pulp mills, as well as the managing directors of the sales offices.
[GOV-1, 21e] The composition of the bodies of Arctic Paper S.A. does not distinguish between independent
members of the management board. Such distinction exists in the structures of subsidiaries based in Sweden.
[GOV-1, 21b] The Management Board and Supervisory Board of Arctic Paper S.A. do not include
representatives of the organisation’s employees. They sit on the boards of Arctic Paper Group companies based in
Sweden.
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The Arctic Paper Group Management Team consists of Executive Vice-Presidents responsible for various areas
of the Arctic Paper Group business, including strategy and sustainability. Persons comprising the Management
Team as at 31 December 2025:
• Michał Jarczyński – General Director of Arctic Paper S.A., Managing Director of Arctic Paper Kostrzyn S.A.
• Katarzyna Wojtkowiak – Chief Financial Officer, Arctic Paper S.A.
• Fabian Langenskiöld – Executive Vice-President of Sales and Marketing, Arctic Paper S.A.
• Jacek Łoś – Executive Vice-President of Procurement, Arctic Paper S.A.
• Wolfgang Lübbert – Executive Vice-President of Strategy and Sustainability, Arctic Paper S.A.
• Mats Frostne – Group HR Manager Arctic Paper S.A.
• Kent Blom – Managing Director of Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB
[GOV-1, 20c] The members of the Management Board and the Supervisory Board of the Arctic Paper Group are
knowledgeable in sustainability-sensitive management regarding human capital, occupational safety and security,
environmental and climate impacts of production. The expertise of the Management Board and Supervisory Board
covers areas related to business management, technical expertise in production, including modern technology,
green energy, sustainable raw materials and products. Knowledge of sustainability-related regulations is passed
on, among other things, during meetings of the Supervisory Board
[GOV-1, 22] The sustainability reporting process is advised by the Sustainability Team, which is made up of
managerial level employees representing various functions and positions within the Arctic Paper Group.
Responsibility for reporting on sustainability issues is within the remit and competence of each team member.
Members of the Sustainability Team are provided with access to expertise in the form of training courses,
workshops, study programmes and also benefit from professional advice from external experts. The sustainability
team reports directly to the Management Board of the Arctic Paper Group on the management of sustainability
issues, including impacts, risks and opportunities.
[GOV 1, 21] The Group’s Supervisory Board consists of five members elected by the General Meeting for a joint
three-year term. Two members are independent. As at 31 December 2025, the Supervisory Board of Arctic Paper
consisted of 3 men and 2 women.
[GOV 1, 21] Table – Diversity in the structure of supervisory authorities
Metric 2025 2024
Total count of Supervisory Board 5 5
Percentage of independent members of the Supervisory Board 40% 40%
Percentage of women on the Supervisory Board 40% 40%
Percentage of men of the Supervisory Board 60% 60%
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[GOV 1, 21c] As at 31 December 2025, the Supervisory Board of the Arctic Paper Group comprises:
Per Lundeen
Chair of the Supervisory Board
Mr Lundeen has been involved with the Arctic Paper Group since 2013,
at which time he was a member of the Supervisory Board of Rottneros
AB. From 2014 to August 2016, he served as President and Managing
Director of Rottneros AB. Since then, he has been President of the
Management Board of Rottneros AB. In addition, Mr Lundeen sits on the
Supervisory Boards of the following companies:
• Fiskeby Board AB: Manufacturer of renewable cardboard packaging;
• Rottneros AB: Pulp producer;
• Strand Packaging AB: Manufacturer of cardboard and cardboard
packaging.
Mr Per Lundeen, a Swedish citizen residing in Lund, is a graduate of
Chemical Engineering and Paper Technology at Chalmers University of
Technology, Goteborg. He has held management positions in the
chemical, paper and packaging industries for 40 years. He worked at
A&R Packaging Group for 20 years, including 12 years as President and
Managing Director. He was also President of ECMA – the European
Carton Manufacturers Association. Mr Per Lundeen holds the office of
Chair of the Remuneration Committee and the Risk Committee.
Roger Mattsson
Vice-Chair of the Supervisory Board
Mr Roger Mattson has served as a member of the Supervisory Board
since 2014. He also currently holds the position of Chief Financial Officer
at Nemus Holding AB.
He holds a university degree in Business, Economics and Law from the
University of Gothenburg. Mr Mattsson has extensive experience in work
in financial and controlling departments, he worked as a group controller
(Toyota Material Handling and Rexam) and as financial manager
(Lantmännen Doggy). He was also the Financial Director Talent Plastics
Group. Mr Mattsson was already involved with the Arctic Paper Group –
from 2007 to 2011, he worked as Group financial controller at Arctic
Paper.
Mr Roger Mattsson is a member of the Audit Committee. Due to his long
experience as financial controller of the Arctic Paper Group and his
several years of experience as a member of committees of the
Company’s Supervisory Board. In addition, it fulfils the condition for a
member of the Audit Committee to have knowledge and skills in the
subject matter of the Company’s business. Mr Roger Mattsson also
serves as a member of the Remuneration Committee and the Risk
Committee.
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Thomas Onstad
Member of the Supervisory Board
Mr Thomas Onstad has served as a Member of the Supervisory Board of
Arctic Paper S.A. since 2008.
He graduated from the London School of Foreign Trade.
He is also a member of the Remuneration Committee.
Zofia Dzik
Member of the Supervisory Board
Ms Zofia Dzik has been an independent member of the Supervisory
Board since 2021.
She also currently sits on the Supervisory Boards of the following
companies:
• Inter Cars SA;
• PTE Generali SA.
• In the past, Ms Zofia Dzik served as a Member of the Supervisory
Boards of the following companies:
• BRW S.A. – a leading furniture manufacturer and distributor in Poland
and Europe (Vice-President);
• PKP CARGO S.A. – Europe’s leading logistics operator and rail freight
carrier (member of the Audit Committee, Chair of the Nomination
Committee);
• Sanok Rubber S.A. – an international manufacturer of rubber products;
• CCC S.A. – fashion industry, production and sale of footwear and
clothing (member of the Audit Committee)
• InPost S.A. – logistics operator;
• PKO Bank Polska SA;
• AmRest CE – an international operator that manages food service
brands.
Ms Zofia Dzik is a graduate of the Cracow University of Economics, the
University of Illinois in Chicago, the Warsaw School of Social Sciences
and Humanities and the Executive Programs of Stanford University and
INSEAD Business School. She holds an MBA from Manchester
Business School. She is a mentor, a certified member of the Association
for Project Management (APM), and a certified member of The John
Maxwell Team, a leading international organisation of leadership
experts.
From 1995 to 2003, she was a consultant at Arthur Andersen and
Andersen Business Consulting and was Director of the Insurance
Department responsible for, among other things, projects for the financial
services sector in the following areas: strategy, business scalability,
mergers, omni-channel sales strategy, reorganisation and finance.
Since 2003, she has been involved with the fintech Group Intouch
Insurance (RSA Group), where she served as CEO of Link4 S.A., the
first direct insurer in Central and Eastern Europe, from 2004 to 2007
(start-up, brand building, CRM, process automation, individual risk
assessment, new technologies, agile method, innovative distribution
channels, leadership, people at work, talent management, succession).
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From 2007 to 2009, she was a member of the Management Board of
Intouch Insurance B.V. in the Netherlands and General Director for
Central and Eastern Europe of the Intouch Insurance Group. At the time,
she was responsible for developing new markets. She was Chair of the
Supervisory Boards of companies: TU Link4 S.A. (member of the
Council until July 2015) and Direct Insurance Shared Services Center in
Poland, Intouch Strachowanie in Russia (start-up), Direct Pojistovna in
the Czech Republic (start-up) and Vice Chair of the Supervisory Board of
TU na Życie Link4 Life SA.
Ms Zofia Dzik is the founder of the Humanites Institute, a think & do tank
in the development of Cohesive Leadership™ and social capital,
systemically linking the topics of people and technology. She is the
founder and chair of the board of the international Centre for Technology
Ethics. Member of the Scientific Council of the IDEAS Institute, a Polish
research and development centre in the field of artificial intelligence and
digital economy, and Member of the Social Council of the Wrocław
University of Technology. Academic lecturer, impact investor, long-time
mentor of start-ups (including MIT), juror (e.g. Chapter of Eagles of the
Republic). Author models: “Coherent Leadership™”, the “Village” Model
for Social Ecosystem Development™, the “Loop – Nonlinear Model for
Long-Term Social Development”.
Ms Zofia Dzik serves as a Member of the Audit Committee and meets
the knowledge and skills requirement for accounting or auditing.
Anna Jakubowski
Member of the Supervisory Board
Ms Anna Jakubowski has been an independent member of the
Supervisory Boardsince 2021.
She also currently serves as President of the Management Board at Life
Institute Sp. z o.o. Sp. K.
Ms Anna Jakubowski graduated in Business Administration (1990) from
Wilfrid Laurier University in Waterloo, Ontario, Canada.
Her professional career began at Procter & Gamble (P&G) Canada
(1991 – 1993), where she worked, as a National Account Manager. From
1993 to 1998, she held various positions ranging from Pharmacy
Channel Manager to Trade Marketing Manager and Area Sales Manager
at P&G Poland. In 1998, she took up the position of Regional Customer
Business Development Manager for P&G – Central and Eastern Europe,
in turn, from 1999 to 2007, she worked as New Business Development
Manager and as Strategy, Business Development Director for P&G
Western Europe (since 2002). She continued her career in Switzerland
at P&G Fabric Care (2007 – 2011) as Associate Director: Marketing.
From 2011 to 2016, she was professionally involved with Coca-Cola,
where she held the following positions: International Group
Marketing/Strategy Director at The Coca-Cola Hellenic Bottling Company
(2011 – 2013), Business Capability Director at The Coca-Cola Company
(2013) and from 2013 – 2016 Member of the Management Board –
Managing Director at Coca-Cola Poland Services Sp z o.o. and
Franchise General Manager for Poland and the Baltics at The Coca-Cola
Company, Management Board Member at Multivita Sp. z o.o., Member
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of the Management Board – Managing Director at Coca-Cola Balti
Jookide AS.
In 2018, she held the position of General Director for Poland and the
Baltics at Marie Brizard Wine & Spirits Sp. z o.o. From 2019 to 2020, she
served as General Director at Avon Cosmetics Polska Sp. z o.o.
Ms Anna Jakubowski serves as a member of the Audit Committee and
she meets the knowledge and skills requirement for accounting or
auditing.
[G1 GOV-1, 5] Each member of the Management Board and the Supervisory Board and the Management Team of
the Arctic Paper Group, by virtue of his or her professional experience, education and in connection with his or her
function, has adequate knowledge and skills in business conduct.
[GOV 1, 22, 23] The functions of the members of the Board of Management and the Supervisory Board of the
Arctic Paper Group have been entrusted to specific individuals, regardless of their gender, but in accordance with
the expertise and experience of these individuals. The composition of Arctic Paper S.A.’s governing bodies largely
depends on the decisions of its shareholders, who decide directly on the composition of the Supervisory Board and
indirectly on the composition of the Management Board. Candidates are assessed according to the principles of
independence as well as merit and diversity criteria to ensure diversity not only by gender and age, but above all in
terms of education, experience, knowledge and skills.
All members of the Group’s Management and Supervisory Boards are qualified in the field of sustainable
development, enabling them to set goals and develop strategies in this area and to oversee it. These consist of
education, titles, professional qualifications, many years of professional experience and skills acquired in the
exercise of specific functions and positions and training completed.
The members of the Management Board and the Supervisory Board improve their knowledge of sustainability
topics. In 2025, members of the Management Board participated in double materiality assessment meetings, which
were conducted with external experts and included educational elements on sustainability impacts, risks and
opportunities and their management. The meetings were held with a wide range of employees responsible for the
reporting process in the Arctic Paper Group. Its results were then analysed and discussed together with the
Supervisory Board.
The Management Board of the Arctic Paper Group is responsible for the proper organisation and conduct of the
process of managing impacts, risks and opportunities. His or her is responsible for managing these areas at a
strategic level, including the analysis of impacts, risks and opportunities considered strategic, and to oversee their
management at an operational and project level, carried out by managers of the Group’s relevant organisational
units and production facilities.
In particular, the Management Board is responsible for:
1. Shaping and implementing risk management policies;
2. Identification, analysis and assessment of impacts risks and opportunities at strategic level;
3. Setting the Group’s risk appetite and tolerance limits;
4. Taking action in response to identified impacts, risks and opportunities, including in particular strategic risks;
5. Analysing the results of actions taken by managers to identify impacts, risks and opportunities, analyse risks
and apply risk controls;
6. Overseeing the conduct of regular and effective impact, risk and opportunities assessments;
7. Review of actions taken.
Support to the Management Board of the Arctic Paper Group in achieving its impact, risk and opportunities
management objectives is provided by a risk management function performed by the Group Financial Controller
with the assistance of individual risk owners. This function is responsible for defining guidelines and internal
procedures, ensuring a consistent approach to risk management across all organisational units, monitoring risk
exposure levels reported by business managers and reporting these levels and key (strategic) risks to the Arctic
Paper Group Board.
Managers of the Arctic Paper Group’s organisational units or production facilities, who also act as Risk Owners
for their units, are responsible for managing impacts, risks and opportunities at the operational level. Each of the
Owners of the management of a given area of impacts, risks and opportunities has many years of experience,
knowledge and skills in the position they hold, which allows them to objectively and accurately estimate the
magnitude of potential and actual impacts and risks.
Heads of organisational units are in particular responsible for:
1. Defining lists of objectives to be achieved by the organisational units (establishments) under their
responsibility and prioritising these objectives;
2. Identifying, analysing and assessing key risks in subordinate organisational units from the point of view of
achieving the operational objectives in the area and document (and justify) this assessment accordingly;
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3. Managing key identified impacts, risks and opportunities material to the production facility organisational unit
they manage;
4. Development, implementation and proper functioning of control mechanisms;
5. Regular monitoring of the level of operational risk and reporting on this to the Risk Manager;
6. Ensuring that its chosen business conduct complies with the Risk Management Policy and Procedure.
The Arctic Paper Group’s risk management process is controlled by the Supervisory Board, which monitors its
effectiveness.
Within the structure of the Supervisory Board of the Arctic Paper Group, 3 committees are distinguished:
Remuneration Committee, Risk Committee and Audit Committee. The committees carry out their tasks by
presenting to the Supervisory Board, in the form of resolutions, motions, opinions, recommendations and reports on
the scope of its tasks.
Basic tasks of the committees:
• Remuneration Committee – to advise the Supervisory Board on remuneration policy, bonus policy and
other matters relating to the remuneration of employees and members of the Company’s and Group
companies’ bodies;
• Risk Committee – to advise the Supervisory Board on the proper identification, assessment and control of
potential risks, i.e. opportunities and threats to the achievement of the Company’s strategic objectives,
with particular emphasis on financial risks, related to both external factors (e.g. volatility of exchange
rates, interest rates, general global economic situation) and internal factors (e.g. cash flow, liquidity
behaviour, deviations from financial budgets and forecasts);
• Audit Committee – to advise the Supervisory Board on the proper implementation and control of the
Company’s and the Group’s financial reporting processes, the effectiveness of internal controls and risk
management systems and to liaise with the auditors. The Management Board and the Supervisory Board
of the Arctic Paper Group, and in particular the Risk Committee of the Supervisory Board, oversee the
process of identifying and managing impacts, risks and opportunities in each country in which the Arctic
Paper Group operates, based on the Risk Management Policy in place. The Management Board of the
Arctic Paper Group, guided by the interests of the Company, defines the strategy and the main objectives
of its operations. It holds regular meetings, including with members of the Management Team, which
includes managers responsible for the various operational areas of the Arctic Paper Group.
GOV-2 Information provided to the administrative, management and supervisory bodies of the company
and sustainability matters
[GOV-2 26a] At least once a year, the Management Board of the Group provides the Supervisory Board with an
update on the process for managing impacts, risks, key identified risks and responses to them. As part of the
annual update, the Management Board of the Group, together with the Management Team, also oversees the
setting of targets in the areas of identified risks and monitors progress in achieving them. Plans to update the
Group’s existing policies to align them with the current assessment of impacts, risks and opportunities are also
discussed at this time. The members of the Group’s Management Board and Supervisory Board, by virtue of their
positions and their many years of experience, are well versed in identifying and assessing the material impacts,
risks and opportunities in the Arctic Paper Group’s operational areas reporting to them.
[GOV-2, 26b] The Management Board and the Supervisory Board of the Arctic Paper Group consider the
impacts, risks and opportunities when overseeing the strategy, major transaction decisions and risk management
process. This is reflected in the focus on the implementation of projects and investments aimed, among other
things, at diversifying revenue sources and sources of electricity supply, which the Arctic Paper Group has included
in the development plans included in the “4P” Strategy.
[GOV-2, 24, 26c] In 2025, the most important sustainability topics and identified risks, impacts and opportunities
with the highest potential impact and likelihood of occurrence in the Arctic Paper Group, which were analysed by
the Management Board and the Supervisory Board of the Arctic Paper Group, included:
1. Risk of changes in the geopolitical environment that may affect the Group’s production processes and
operations;
2. Occupational accident risks and accident rates – LTI;
3. Risk of declining demand for paper products/changing customer preferences – increasing digital demands
(popularity of substitute products and services “e.g. e-books, VOD”);
4. Risk of market competition dynamics;
5. Regulatory risks related to, inter alia, planned deforestation regulations;
6. Impact of GHG emissions in own operations and value chain;
7. Impact of water consumption levels in own operations and value chain;
8. Impacts related to air and water pollution;
9. High dependence on renewable resources and issues related to their availability and price;
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10. Risk of low participation of women in leadership positions.
GOV-3 Integrating sustainability-related outcomes into incentive schemes
[GOV-3, 29, AR 7] [E1 GOV-3 13] The remuneration of the members of the Management Board and the
Supervisory Board of the Arctic Paper Group is determined based on the provisions of the Remuneration Policy,
which is effective as of 31 August 2020. The applicable remuneration components distinguish between fixed and
variable remuneration. Variable remuneration may be calculated on the basis of financial and non-financial
indicators set by the Supervisory Board, which may also potentially include, inter alia, the company’s achievement
of its sustainability and environmental objectives.
[GOV-3, 29] During the reported period, key features of the Group’s incentive scheme did not include variable
remuneration linked to sustainability targets and/or impacts, including those related to climate change.
Determination of the criteria for variable remuneration is the responsibility of the Supervisory Board. The Arctic
Paper Group will present revised metrics of sustainability-related remuneration performance by 2027.
GOV-4 Due diligence statement
[GOV-4 30, 32 AR 8-AR 10] The Arctic Paper Group undertakes systematic preventive actions aimed at mitigating
and addressing actual and potential adverse impacts on the environment and society, including through the
following actions:
1. In line with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, the Arctic
Paper Group takes into account established policies in the countries in which it operates and considers the
views of its stakeholders. The Arctic Paper Group works closely with the local community and is a member of
local and industry organisations, contributing to the development of local communities.
2. As a company listed on the Warsaw Stock Exchange (WSE) and the Swedish Stock Exchange (Nasdaq),
Arctic Paper is guided in its business and operational activities by good corporate governance practices
applicable to public companies(for more on compliance with the provisions of the Good Practices for Listed
Companies, see the section of the consolidated report on corporate governance on page 43). In addition,
Arctic Paper SA and Rottneros AB, as public entities listed on regulated markets, must comply with the
disclosure requirements of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16
April 2014 on market abuse regarding price-sensitive inside information and must therefore guarantee the
transparency of business activities. In discharging these responsibilities, the Arctic Paper Group Management
ensures the integrity of the accounting and financial reporting systems, including independent audit, risk
management control systems and financial and operational controls, as well as compliance with the law and
relevant standards.
3. Discriminatory or disciplinary action or engaging in any other type of action that results in reprisals against
employees, union representatives or other employee representatives, are not tolerated.
4. The Arctic Paper Group has developed and implemented a risk management system across all operational
areas of the Group to identify, prevent and mitigate actual and potential adverse impacts.
5. The Arctic Paper Group provides its employees and stakeholders with the opportunity to report, in good faith,
irregularities observed in the Group’s activities (whistleblowing).
6. The Arctic Paper Group’s production facilities ensure health and safety protection standards, including the
prevention of accidents and health injuries related to or arising in the course of work, by minimising – to the
extent practicable – the causes of the hazards inherent in the working environment at production facilities.
7. The Arctic Paper Group does not engage in any corrupt activities, including offering, promising or giving any
undue financial or other benefits to public officials, employees of entities with which the company has a
business relationship, or their relatives or associates.
All of the above principles are brought together in the Arctic Paper Group Code of Conduct for the Value Chain.
The Arctic Paper Group also expects its suppliers and other third parties to adhere to the high standards and
values it represents, as described in the Code of Conduct, and that they will sign the “Declaration of Suppliers and
Third Parties on Acceptance of and Compliance with the Arctic Paper Group Code of Conduct”. The Arctic Paper
Group is committed to maintaining fair and ethical conduct in all its dealings with stakeholders and to upholding the
principles of the UN Universal Declaration of Human Rights and the principles of the UN Global Compact.
On 31 May 2023, the European Parliament and the Council of the Union adopted Regulation (EU) 2023/1115 of
the European Parliament and of the Council of 31 May 2023 concerning the making available on the Union market
and the exportation from the Union of certain goods and products related to deforestation and forest degradation
and repealing Regulation (EU) No 995/2010 (EU Deforestation Regulation (EUDR)). The purpose of the regulation
is to ensure that goods imported and exported within the European Union do not contribute to deforestation or
forest degradation during their production. The EUDR imposes obligations on importers, exporters and traders of
goods with a view to environmental protection and sustainable development. As a producer of paper and pulp, the
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Arctic Paper Group falls within the scope of the Regulation, which will come into force on 30 December 2026. In
2025, the Arctic Paper Group continued to work to prepare the Group to meet the technical requirements related to,
among other things, submitting due diligence declarations in a dedicated EU IT system, adapting its own IT
systems to manage due diligence declarations. Preparatory work was also carried out by Arctic Paper Group
suppliers, who will also be covered by the obligations under the regulation.
BASIC ELEMENTS OF THE DUE DILIGENCE PROCESS PARAGRAPHS IN THE SUSTAINABILITY STATEMENT
a) Consideration of due diligence in management,
strategy and business model
ESRS 2 GOV-2, ESRS 2 SBM-3
b) Engagement with affected stakeholders at all key
stages of the due diligence process
ESRS 2 GOV-2, ESRS 2 SBM-2, ESRS 2 IRO-1, S1 SBM-2, S1-2, E1-3
c) Identification and assessment of adverse impacts ESRS 2 IRO-1, ESRS 2 SBM-3, S1-SBM 3
d) Taking action to reduce identified adverse impacts ESRS 2 MDR-A, S1-4, E1-3, E2-2, E3-2, E5-2
e) Monitoring the effectiveness of these efforts and
providing relevant information in this regard
ESRS 2 MDR-A, ESRS 2 MDR-T, S1-5, S1-9, S1-10, S1-14, S1-16, S1-17, E1-5,
E1-6, E2-4.
GOV-5 Risk management and internal controls over sustainability reporting
[GOV-5 34, 36] The Arctic Paper Group has set up a Sustainability Team to prepare annually a “Sustainability
Statement”, coordinate the work in the different organisational units of the Arctic Paper Group, monitor the data
collection process across the Group. The Sustainability Team consists of 5 members from a variety of roles within
the Arctic Paper Group including Legal, Strategy & Development, Environment & Quality Systems, Supply Chain &
Logistics, HR. The Sustainability Team reports directly to the Management Board of the Arctic Paper Group, to
which it reports on the status. The Group’s Management and Supervisory Boards hold regular meetings with the
Sustainability Team, which reports on progress, presents material issues and suggests possible solutions.
In the course of the sustainability reporting work carried out in previous years, methods and responsibilities
within the Arctic Paper Group for collecting, checking and aggregating data were developed. Those responsible for
reporting on sustainability issues regularly deepen their knowledge, including by attending training courses related
to the European Sustainability Reporting Standards.
Selected employees of the Arctic Paper Group’s operating departments are responsible for collecting data from
the various areas covered by the reporting. The data is then collected and consolidated by the Sustainability Team,
which analyses the data and checks its accuracy. The effectiveness of the data collection process is monitored on
an ongoing basis and any discrepancies are explained.
One of the identified material risks associated with sustainability reporting is the risk of not meeting national or
EU legal requirements for environmental standards, the risk of limited control over suppliers and their practices and
the availability of upstream or downstream data, and the timing of information availability. The Arctic Paper Group
makes every effort to maintain the completeness and integrity of the data and the accuracy of the estimated results.
The 2025 Sustainability Statement was prepared based on numerical data collected in standardized MS Excel
spreadsheets and descriptive data updated in an MS Word file based on the previous version of the report. Data
was collected in accordance with established practices, facilitating the identification of any omissions or errors and
allowing for quick additions or corrections. Consistency and accuracy of information were supported by ongoing
reconciliation of data with individuals responsible for specific areas and verification of year-to-year comparability.
To minimise the risks identified in this area from 2026 onwards, the Arctic Paper Group will use a unified
software for collecting and aggregating data on sustainability reporting, which also includes data reporting by the
Arctic Paper Group’s suppliers, and will educate employees and use external expert support. In 2025, work began
on the implementation of the system, adapting the tool to the needs of the organisation, e.g. in terms of the scope
of the data, the way it is calculated and presented.
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SBM-1 Strategy, business model and value chain
[SBM-1 42, AR 14] The core business of the Arctic Paper Group is the manufacture and sale of paper and pulp.
The Group offers voluminous book paper and a wide range of products in this segment, as well as high-grade
graphic paper and also produces many types of wood-free uncoated and coated paper and wood-based uncoated
paper for printers, paper distributors, book and magazine publishers and the advertising industry.
In 2025, paper mills had a total capacity of 640,000 tonnes of paper per year (695,000 tonnes in 2024); and pulp
mills had a total capacity of 400,000 tonnes of pulp per year, as in 2024.
As at 31 December 2025, the Group had 13 paper sales offices providing access to all European markets,
including Central and Eastern Europe.
[SBM-1, 40, 40g] Adopted in September 2021, the Arctic Paper Group’s “4P” strategy responds to changing
market and regulatory conditions by combining business growth with sustainability. It is based on four pillars:
“Paper”, “Pulp”, “Packaging” and “Power”, which together form a coherent model for the use of renewable forest
resources. The strategy aims to diversify the business, increase the Group’s resilience and create long-term value
while reducing environmental impact and supporting stakeholders.
1. The “Paper” pillar focuses on maintaining Arctic Paper’s strong position in the premium graphic papers
segment. Paper production is based on renewable raw materials from certified sources, which is in line with
responsible forest management. The Company is committed to high quality, process efficiency and reducing
its environmental footprint by, among other things, reducing energy consumption and emissions. This ensures
that the Paper pillar remains a stable source of revenue while supporting the environmental and economic
objectives of the strategy.
2. The “Pulp” pillar strengthens the Group’s position in the wood fibre-based value chain, including through its
capital commitment to Rottneros. Pulp is a key renewable raw material, used in a wide range of applications in
line with the idea of a circular economy. This pillar promotes business diversification and reduces dependence
on one market segment.
3. The “Packaging” pillar responds to the growing market demand for sustainable alternatives to plastic. Arctic
Paper Group is developing packaging based on natural fibres that are renewable, recyclable and in line with
current regulatory and consumer trends. This segment represents an important growth area, combining
economic potential with a real contribution to reducing environmental pollution. The development of packaging
also supports the Group’s image as a provider of responsible material solutions.
4. The “Power” pillar focuses on increasing the Group’s energy independence and reducing CO₂ emissions by
investing in renewable energy sources such as solar and bioenergy. In-house energy production reduces
operating costs and risks associated with energy price fluctuations. At the same time, it supports Arctic
Paper’s Group long-term climate goals. This pillar reinforces the coherence of the “4P” Strategy, combining
economic efficiency with environmental responsibility and benefits for the social environment.
With its “4P” Strategy, the Arctic Paper Group covers 2/3 of its energy needs through its own production. More than
50% of the energy consumed comes from renewable sources.
The Arctic Paper Group has completed the construction of its second moulded pulp fibre packaging plant, which
allows it to replace plastic food packaging, thereby helping to reduce the amount of plastic waste generated. In
Sweden, a biomass drying and pellet production facility has been finalised at the Grycksbo plant, which is
scheduled to be operational in spring 2026. The investment will reduce energy costs by approx. SEK 50 million per
year. In addition to electricity and steam, the plant will produce approx. 50,000 tonnes of pellets per year, which is a
solid fuel in pellet form, mainly for combustion in individual as well as collective heating systems as an alternative to
fossil fuels for heat and power generation.
The above actions resulting from the “4P” Strategy increase the level of diversification of the Arctic Paper
Group’s revenues and the Group’s energy independence in the long term.
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[SBM -1, 42, AR 14] Description of the Arctic Paper Group’s business model and value chain
ARCTIC PAPER GROUP VALUE CHAIN
UPSTREAM ARCTIC PAPER GROUP, OWN OPERATIONS DOWNSTREAM
SUPPLIES GROUP PROCESSES PROCESSING WASTE
Suppliers of raw materials Transport All entities in the Group with operational and support processes Customers and consumers Waste managers
Suppliers of raw materials that are
used in production.
FSC® and PEFC certified suppliers are
key partners in the supply chain.
Primary raw materials:
- wood
- pulp
- water
- pigments
- chemical additives
Energy raw materials:
- electricity
- gas
- heat
Transport companies that
deliver products produced at
Arctic Paper Group entities to
customers.
Operational processes:
- paper and pulp production,
- sourcing,
- R&D,
- logistics,
- energy production – from photovoltaic
panels, hydroelectric plants, biomass,
- quality control,
- marketing and PR communication,
- sales,
- management,
- investor relations,
- legal services,
- IT support.
Support processes:
management, administration,
HR, health and safety, finance,
accounting, controlling.
A customer is an entity that buys and
processes a product produced by Arctic
Paper Group entities in the course of its
business for profit.
Arctic Paper’s key customers are:
- printers,
- paper distributors,
- book and magazine publishers,
- the advertising industry and
- packaging manufacturers.
The consumer – the end-user is the entity
using the paper packaging for food
packaging. Consumers – end users –
individuals who use the packaging
indirectly, e.g. when buying takeaway food
from our customer.
The waste is:
- by-products of paper and pulp
production, which are converted
into biomass fuel;
- packaging used by the
consumer.
Origin of raw materials:
Europe and South America (Brazil,
Chile, Uruguay).
Energy is sourced:
1) from internal sources,
2) Sweden – RES, nuclear power
plants
3) Poland – energy mix
Transport companies providing
raw material delivery services in
international transport.
Paper and pulp production plants in Poland and Sweden.
Distribution:
Offices sales offices are located in Germany, the UK, France, Poland,
Austria, Spain and the Scandinavian and Baltic countries.
The sale and distribution of products also includes cooperation with local
distributors on other continents.
Arctic Paper sells mainly in European markets, where Germany is the
dominant market, accounting for around 20% of sales. Other important
markets are Poland (17%), the UK and Ireland (11%), Austria and Central
Europe (11%), and France (9%). Smaller shares are held by the Baltic
countries (6%), Scandinavia (10%), Benelux (4%), other European countries
(10%). Outside Europe, sales are around 2%, mainly due to high transport
costs.
Companies managing waste within the European Union.
Stakeholder groups influenced by the Group in a particular link in the value chain
suppliers, customer, consumer, potential investors, NGOs, local
communities
employees, investors, financial institutions, public administration, local
communities, NGOs
customer, consumer, potential investors, NGOs, local communities
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[SBM-1, 40ai, 40e, 40f, 42b, AR 12-13, 14] Product range and customer groups
• graphic paper, in particular:
• white offset paper that we produce and distribute primarily under the Amber brand which is one of the
most versatile types of paper destined for various applications;
• woodfree bulky book paper that we produce under the Munken brand, used primarily for book printing;
• high quality graphic paper with a particularly smooth or rough surface, used for printing a wide variety of
advertising and marketing materials, which we produce under the Munken Design brand;
• coated wood-free paper,
• uncoated wood-free paper,
• packaging papers,
• sulphated pulp,
• mechanical fibre pulp.
Selected Arctic Paper Group products, such as Munken Design, Amber Graphic, G and Arctic Volume White, have
been verified and approved for use in Nordic Ecolabel certified products.
The factories in Grycksbo, Kostrzyn and Munkedal have FSC® (Forest Stewardship Council®) and the
corresponding PEFC (Programme for the Endorsement of Forest Certification) chain of custody certificates, as well
as the EU Ecolabel and Nordic Ecolabel (Nordic Swan), which guarantee that the raw material comes from
sustainable sources. We can therefore guarantee our customers that our products come from well-managed,
responsible and certified forest resources.
All wood used for pulp production at Rottneros is traceable and pulp is available with PEFC or FSC® or FSC
controlled wood certification.
The pulp produced by Rottneros is approved for the production of paper and board for food contact, as well as
the Nordic Swan and EU Ecolabel. One type of pulp produced by Rottneros is e-pulp, which is used as an
insulating material, used, for example, to insulate transformers and high-voltage cables on the seabed, thus
reducing the use of artificial materials.
Food packaging produced at Rottneros Packaging is certified for food contact and is available with FSC®
certification.
The Arctic Paper Group’s customer base includes both direct and indirect customers.
Direct customers purchase the Group’s products from paper mills. Indirect customers do not purchase the
Group’s products themselves, but use printers or paper wholesalers as intermediaries. Despite this, they are an
important target group for the Group’s marketing activities, as it is the indirect customers who recommend or
indicate the use of the Group’s products to the direct customers. The groups of direct and indirect buyers of
products include:
• printing houses – they are direct buyers straight from the Group’s Paper mills;
• wholesalers – they are direct buyers of paper manufactured by the Group for further re-sale;
• publishers – are direct and indirect customers who purchase paper produced by the Group directly from the
Group for use in their publishing activities, and commission or recommend the use of its paper to printers to
whom they themselves commission the printing of books or other publications;
• advertising agencies – they are mainly indirect customers who do not purchase our products, but play an
important role in commissioning and recommending printers for its products, especially high-quality paper for
company annual reports, brochures, leaflets and packaging;
• final customers and brand owners – they are direct and indirect customers, purchasing our products directly,
as well as playing an important role in recommending our products to printers they have entrusted with
printing.
The main customers for the pulp mill’s products are manufacturers of printing paper, paper hygiene products and
paperboard, as well as electrical appliances and filters. Pulp is supplied to entities that do not have the capacity to
produce it in-house, as well as to customers who produce a selected type of pulp and are looking for a supplier of
another type of pulp.
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The Group recognises that it is not significantly dependent on any particular customer. The share of the 3
largest customers in the Group’s consolidated revenue for the year 2025 represents approx. 20% of the value of
total sales revenue (18.3% in 2024). Additional businesses of the Group, partly subordinated to paper and pulp
production, are:
• packaging production,
• electricity generation,
• electricity transmission,
• electricity distribution,
• production of heat,
• distribution of heat,
• logistics services,
• distribution of paper and pulp.
[SBM-1, 40aii, AR 12-13] Our main markets
Paper sales in 2025
Paper sales in 2024
a er sa es n
G
A E
N
B
B
E
E
a er sa es n
G
N
B
B
E
E
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Pulp sales in 2025
Pulp sales in 2024
[SBM-1, 40aiii, AR 12-13] As at 31 December 2025, the Arctic Paper Group employed nearly 1,500 people in its
paper mills: Arctic Paper Kostrzyn (Poland), Arctic Paper Munkedals (Sweden) and Arctic Paper Grycksbo
(Sweden); its paper sales companies; the pulp companies Rottneros and Vallvik (both located in Sweden); and
companies producing food packaging (Poland and Sweden). In 2024, the Group employed 1584 people. The
change has been described in subsection S1-6 Characteristics of the undertaking’s workforce.
Country Number of employees in 2025
Sweden 941
Poland 520
Other 38
Total 1499
[SBM-1, 40aiv, AR 12-13] The Arctic Paper Group does not manufacture or sell materials, products or services that
are prohibited in certain markets.
The Arctic Paper Group’s consolidated sales revenue for the 12 months of 2025 was PLN 3,197 million.
[SBM-1, 40b, AR 12-13] The production of paper and wood products is included in the ESRS standards in the
SEC-1 activity sector classification code: MPW and derives its main revenues from these activities. The following
table sets out revenue and profit figures and certain assets and liabilities from continuing operations by segment of
the Arctic Paper Group for the 12 months ended 31 December 2025 and as at that date.
sa es n
N
O
G
E
sa es n
N
O
G
E
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Paper Pulp Total Total continuing
operations
Revenues
Sales to external customers 2 224 339 973 252 3 197 595 3 197 595
Sales between segments - - - -
Total segment revenues 2 224 339 973 252 3 197 595 3 197 595
[SBM-1, 40B, AR 12-13] The Arctic Paper Group does not conduct activities in, nor derive revenues from, the fossil
fuels sector (coal, oil and gas), controversial weapons (anti-personnel mines, cluster munitions, chemical and
biological weapons), or the cultivation or production of tobacco.
SBM-2 Interests and opinions of stakeholders
The Arctic Paper Group has a systematic dialogue with its stakeholders, as described in the table below.
[SBM -2, 45a i, ii, iii, iv, AR16] Table – Key stakeholders, method and objectives of their engagement
MAIN CATEGORY OF
STAKEHOLDERS
MAIN DIALOGUE METHODS AND
COMMUNICATION CHANNELS METHOD OF ENGAGEMENT PURPOSE OF ENGAGEMENT
Employees Direct communication, surveys,
satisfaction surveys, intranet,
Whistleblowing system
Individual meetings, survey,
satisfaction research, training and
education
Obtaining feedback on the needs and
assessment of our activities,
understanding the current and
potential nature of the organisation’s
impact on employee well-being
Customers Direct communication through the
sales organisation, Value Chain Code
of Conduct and Sustainability Policy,
Whistleblowing system
Survey research, focus group
research (FGI)
Obtaining feedback on our needs and
assess our activities, adjust our
product and service offerings
Suppliers Direct communication through
purchasing departments, Value Chain
Code of Conduct and Sustainability
Policy, Whistleblowing system
Survey research, focus group
research (FGI)
Obtaining feedback on the needs and
evaluation of our activities
Investors Investor meetings, investor box,
press releases, current and periodic
reports available to the public,
Whistleblowing system
Investor meetings, general meetings
of shareholders
Obtaining an assessment of the
Arctic Paper Group’s operations,
ensure transparency in
communication and equal access to
information about the Arctic Paper
Group’s operations
Local communities Investor box, press releases, current
and periodic reports available to the
public, Whistleblowing system
Survey, meetings with local
authorities
Obtaining feedback on the needs and
assessment of Arctic Paper Group’s
activities on the local environment
In addition to the opinion surveys conducted in the form of questionnaires, the Arctic Paper Group conducts
continuous correspondence and exchange of opinions with stakeholders, and the most material issues raised by
stakeholders are then presented to the Group’s Management and Supervisory Boards for further discussion. One
effective channel for obtaining numerous opinions from outside the organisation is the investor box, which receives
enquiries from the media or NGOs. In addition, the Arctic Paper Group is an active member of industry associations
of paper and pulp producers in Poland and Sweden and in the European Union, among others:
• Swedish Forest Industry Federation:
• Association of Polish Papermakers;
• UTIPULP – Group of European market pulp users;
• Euro-Graph - European Association of Graphic Paper Producers
An additional communication tool is also the whistleblower channel, which can be used anonymously by any
stakeholder.
S1 SBM-2 Stakeholder interests and opinions.
[SBM-2 12, AR4, AR5] In 2025, the Arctic Paper Group updated its double materiality analysis with a stakeholder
survey that included Arctic Paper Group and Rottneros and an internal workshop to assess sustainability impacts,
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risks and opportunities. The full process, and the topics identified by stakeholders, are described below in extract
IRO-1 Description of the process for identifying and assessing material impacts, risks and opportunities.
CATEGORY OF
STAKEHOLDERS
CHANNELS OF COMMUNICATION AND METHOD OF
INVOLVEMENT PURPOSE OF ENGAGEMENT
Employees Direct communication, surveys, focus studies, satisfaction
surveys, intranet, whistleblowing system, training and education,
cooperation with trade unions.
Obtaining feedback on the needs and assessment of our
activities, understanding the current and potential nature
of the organisation’s impact on employee well-being.
Employee feedback is an important source of information on the organisational and production solutions being
implemented. The Group has ongoing communication and dialogue with its employees, which takes place through
face-to-face discussions, regular meetings and debriefing discussions, surveys and focus groups. The Group
actively involves employees in the life of the company, for example through the “Suggestion Box” – ideas submitted
by employees are analysed and a selection of these are put into practice. The opinions and interests of employees
are used primarily at operational and organisational level, while they do not form a direct basis for changes to the
Group’s business model or strategy.
[SBM-2, 45] There have been no changes to Arctic Paper’s business model in 2025, nor have there been
events in the environment that would materially affect the model and the nature and scale of Arctic Paper’s social,
environmental or economic impact. Nor are changes planned to modify stakeholder relationships and opinions.
[SBM-2, 45a v, 45b, 45d] The aspects described above are subject to a broader annual discussion within the
organisation, involving the Management Board and the Supervisory Board of the Arctic Paper Group, aimed at
gaining a better understanding of the current and future nature of relationships with stakeholders in the context of
potential changes, including regulatory developments, as well as observed social trends and the impact of the
Group’s operations on its surroundings. Each time, the results of the stakeholder survey are analysed and
discussed by the Management Board and the Supervisory Board.
IRO-1 Description of the process to identify and assess material impacts, risks and opportunities
[IRO-1 53] The Arctic Paper Group has been subject to sustainability reporting under the CSRD since 2024, so the
first double materiality assessment under the European ESRS reporting standard was performed in 2023 and 2024.
In 2025, the study was repeated – topics were again selected for analysis and sustainability impacts, risks and
opportunities were assessed.
The 2025 double relevance study, like the previous ones, was broken down into 5 key steps:
1. Understanding the context of the organisation and gap analysis;
2. Identification of topics to be analysed (including the Stakeholder perspective);
3. Assessment of impacts, risks and opportunities;
4. Selection of material topics;
5. Validation of material topics with Group Management.
Step 1: As a first step, a review of information about the Group and its business environment took place to
understand the current situation, which took into account the perspective of all Group companies (including the
packaging company Kostrzyn Packaging sp. z o.o. and the Rottneros Group company, which were not taken into
account in the previous year). Among other things, possible gaps among material sustainability topics were
analysed, a further sample of key external stakeholders (customers, suppliers, local authority representatives) was
selected and surveyed with them in the form of interviews and focus groups.
Stakeholders identified what they considered to be the organisation’s greatest sustainability impacts in each of
the three areas – environmental, social and governance. The issues they highlighted most often were energy
DO B E MATER A T ANA S S
STE STE STE STE STE
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consumption, switching to renewable energy, developing a circular economy, reducing greenhouse gas emissions
and managing diversity (equal opportunities for women and men) and creating jobs for local communities.
Stakeholder opinions were taken into account in the assessment of impacts, risks and opportunities.
The stakeholder survey, conducted in 2025, was a deepening of an earlier survey carried out in 2023. The
selection of questions and the group of stakeholders invited to the survey was preceded by an analysis of the
organisation’s current context.
The most common issues from this stage, were included in the list of topics assessed by the Arctic Paper Group
from the perspective of materiality of impacts, risks and opportunities.
Step 2: As a next step, a series of internal workshops were held on:
a) actual and potential impacts on people and the environment in the context of the topics and sub-topics both
identified in ESRS Standard 1 AR 16 and from a list of issues selected by the organisation;
b) the Group’s risks and opportunities related to social, environmental and organisational governance issues
identified in the ESRS standard.
The workshop was attended by employees responsible for the various business areas. The results developed
during the workshop were then discussed with members of the Management Board.
The identification of sustainability risks and opportunities was primarily based on an analysis of impacts and
dependency on resources. Other factors that could generate sustainability-related risks and opportunities for the
Group, such as the business environment, Group strategy, were then also analysed.
The topics taken into account were drawn from a list of topics of relevance to the organisation, selected at the
preliminary analysis and stakeholder feedback stage, and related to the impact of the Group’s manufactured
products on the environment and local communities, consumption of natural resources and waste management.
Actual and potential impacts on biodiversity and ecosystems at their own locations and in the value chain were
considered. However, there was no detailed consultation with affected communities regarding the sustainability of
shared biological resources and ecosystems. Arctic Paper Kostrzyn is located close to a Natura 2000 area – the
Warta Mouth Landscape Park. Arctic Paper Munkedals is located on the west coast of Sweden, close to the
Örekilsälven River, which is also part of the Natura 2000 network. The river flows from the protected Gullmarn
Fjord. The impact of the two paper mills on these areas is described in subsection SBM-3, covering material
impacts, risks, opportunities, and their interrelationship with the strategy and business model.
Step 3: The discussion of the importance of the different issues took into account the perspective of the main links
of the Arctic Paper Group’s value chain, i.e. the supply chain (taking into account the resources, raw materials and
services that are most important for the Group’s business model) and the Group’s own operational activities
(including service delivery processes, customer service, ensuring high product quality, customer and supplier
relations, and responsible marketing communication principles).
As last year, individual impacts were described and rated on a 3-point scale in each category (scale, scope and
irreversibility). Likelihood was assessed on a scale of 1 to 3, in the short (up to 1 year), medium (1 to 5 years ) and
long (more than 5 years) time horizons. Severity is understood here as the sum of 3 categories:
• Scope, understood as:
1 – local scope (relating only to a specific region, individual facility),
2 – national scope (referring to the impact in one EU country, e.g. Poland, Sweden),
3 – transnational and non-European scope (referring to activities in many EU countries and beyond, e.g.
sourcing pulp from South America).
• Scale, understood as:
1 – small scale (occasional/one-off impacts or negligible harmful/positive impacts on humans or the
environment),
2 – moderate scale (impact of below average level of phenomenon or impact with moderate level of
harm/benefit),
3 – high scale (frequent occurrence of the impact/incident or impact with a high level of harm/benefit to people
or the environment).
• Irreversibility assessed as:
1 – an easily reversible phenomenon,
2 – moderately reversible phenomenon (with time, commitment and some reasonable financial investment),
3 – irreversible phenomenon (including requiring compensation or damages).
Financial materiality:
The assessment of financial materiality was based on two key elements: the likelihood of a given risk or
opportunity occurring, taking into account the time horizon, and the magnitude of the potential financial
consequences for the Company should it materialise. Financial impacts were subjectively assessed by the
undertaking’s experts on a three-point scale from 1 to 3, depending on the impact on the Group’s financial position,
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including its value, financial performance and potential revenues or costs, such as those resulting from attracting or
losing customers. The scale of the financial effect has been aligned with the financial thresholds of the risks
identified as part of the Arctic Paper Group’s risk management process. Risks related to sustainability issues, both
from a regulatory and operational perspective, relate to the most significant areas of the Arctic Paper Group’s
business.
Step 4: In order to determine which topic is material for reporting, it was assumed:
With the materiality of the impact, the cut-off threshold was determined by calculation: 30% of the score of the
product of the average of likelihood (assessed on a scale of 1-3 over 3 time horizons) and severity (with a
maximum pool of 9 points), consisting of the sum of 3 criteria, i.e. scale (scoring 1-3), extent (scoring 1-3) and
irreversibility (scoring 1-3). The cut-off threshold for the maximum assessed impact is 30% of the maximum score,
except for actual positive impacts, for which the cut-off was set at 50%. Mathematical rounding has been used to
calculate the thresholds for receipts.
• For potential adverse impacts, the maximum number of points is 27 (cut-off of 8 points). This score was
obtained by multiplying (the average of) likelihood (for potential impacts) by severity (which consists of the
extent, scale and irreversible nature of the impact).
• In the case of a potential positive impact, irreversibility was not assessed, therefore the maximum number of
points from the severity of the potential positive impact is 6 and the cut-off was expressed as 30% of the
product of the maximum likelihood (3) and severity (6), i.e. 30% of 18, which is 5 points.
• In the case of actual impacts, the likelihood and severity of the impacts were analysed, and the result was
the sum of all the severity and likelihood categories assessed, reaching a maximum value for actual adverse
impacts: 9, and for actual positive impacts: 6 (there is no criterion of irreversibility). The cut-off threshold
used in this case is for actual adverse impacts respectively: 3 and positive: 3 points.
Financial materiality was assessed similarly, where the cut-off threshold was determined by calculation: 30% of the
result of the product (average of) the likelihood (assessed on a scale of 1-3) and the financial effect scale (1-3). The
cut-off for maximum assessed financial materiality is 30% of the maximum score pool, i.e. out of 9 points, resulting
in a score of 2.7 points.
The course of the double materiality analysis process for IRO-1 E1, E2, E3, E4, E5 and IRO-1 G1, including the
methodology used, assumptions and stakeholder consultation issues, is the same as the general process
description in ESRS 2 of IRO-1. The analysis used both external data – including academic sources, industry
reports, ESG ratings, competitor reports – and detailed internal company data, analysed in workshops on impacts,
risks and opportunities with employees responsible for the area in the Arctic Paper Group. The double materiality
process considered the resources used by the Group (listed in order of importance), in particular: pulp, wood,
chemicals, and electricity. The topics of pollution, water, and circular economy are particularly relevant in the
locations where the Group's production facilities are located, i.e., Munkedals, Grycksbo, Kostrzyn, Rottneros, and
Vallvik. Detailed information on the materiality assessment results can be found in ESRS Disclosure 2 SBM-3.
Internal data analysis covered all production facilities and theirs operations included:
E1 – CLIMATE CHANGE
• energy consumption data and emissions associated with purchased energy (electricity, process steam, fossil
fuels, biomass) by location;
• data on the production and consumption of electricity from own RES installations;
• data on GHG emissions (scope 1,2, 3), including emissions from boilers and combustion installations;
• energy efficiency data – particularly with regard to the costs of installing, maintaining and repairing energy
efficiency equipment.
E2 – POLLUTION
• data on emissions to air, water, land: emissions of pollutants from installations exceeding the relevant
threshold value set out in Annex II to Regulation (EC) No 166/2006 of the European Parliament and of the
Council excluding GHG emissions (disclosed in section E2-4);
• data on substances of concern used in the production process;
• location and operations analysis.
E3 – WATER AND MARINE RESOURCES
• total water consumption data;
• data on the closed-loop circulation of process water (degree of recirculation);
• analysis of geographical areas;
• information on the location of plants in relation to areas at risk of water scarcity;
• wastewater discharge quality parameters;
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• analysis of goods related to marine resources;
• analysis of sectors and segments related to issues relevant to water resources.
E4 – BIODIVERSITY AND ECOSYSTEMS
• the locations of production facilities close to and further away from biodiversity sensitive areas;
• sources of wood raw material – share of FSC® / PEFC certified raw material and due diligence procedures
for suppliers.
E5 – CIRCULAR ECONOMY AND WASTE
• resources used by the Group;
• data on waste generation, recovery and recycling rates.
As part of the update to the double materiality analysis process carried out in 2025, the materiality threshold for
actual positive impacts has changed from 30% in 2024, to 50% in 2025. The Group plans to carry out further
updates to its double materiality analysis processes when changes in strategy and business model occur.
Step 5: Members of the Arctic Paper Group Management Board were involved in deciding on the final materiality or
lack of materiality of the sustainability topics analysed, and the results were then presented to the Supervisory
Board. A list of significant impacts, risks and opportunities is presented in the table for SBM-3 Material sustainability
impacts, risks and opportunities. The list of impacts and risks reviewed during the work with Board members and
the conclusions on the identification of the main business opportunities for the company related to the topic of
sustainability form the basis for the Arctic Paper Group to identify a list of ESRS indicators (so-called disclosures),
the selection of which is based on confirmation of the materiality of the issue.
The Management Board of the Arctic Paper Group is responsible for the proper organisation and conduct of the
impact, risk and opportunity management process. His or her is responsible for managing these areas at a strategic
level, including the analysis of the impacts, risks and opportunities deemed strategic, and to oversee their
operational and project management, carried out by the managers responsible for the Group’s various
organisational units and production facilities, including sustainability risks.
ANALYSIS OF CLIMATE RISKS
[E1.IRO-1 20a, AR 9 a b, AR 10, 11] In 2024, the Arctic Paper Group performed a detailed analysis of climate risks,
which deepened the results of the double materiality analysis. Climate risks were identified in the short, medium
and long term, taking as a short horizon the current financial year (1 year), as a medium horizon a period of up to 5
years (in line with the standard horizon for strategic and financial planning) and as a long horizon a period of more
than 5 years (up to 15 years, in order to allow for the analysis and assessment of risks over a period of time to take
into account the average life cycle of assets and, at the same time, the first years of extreme physical climate
risks).
The analysis of climate risks launched in 2024 included, in particular:
• fuel consumption in power and heat generation processes (including natural gas at the Kostrzyn plant’s
combined heat and power plant);
• electricity consumption at production facilities (own and purchased energy);
• biomass energy production (Grycksbo paper mill);
• emissions related to pulp mill operations (a Rottneros Group company);
• costs and risks associated with the EU ETS and CO₂ emission allowances (included in the risk factors
associated with the Arctic Paper Group’s operations);
• consumption of key raw materials (pulp, wood, water) and energy as important cost and emission factors.
The structure of the energy sources at each location was also taken into account, including the in-house gas-fired
CHP plant at the Kostrzyn plant, the use of biomass at the Arctic Paper Grycksbo plant and the partial coverage of
energy requirements in-house at the Vallvik plant.
The Arctic Paper Group has mapped the entire value chain; however, it does not have an analysis of the climate
impacts of the value chain links.
The Group’s assessment of actual and potential climate change impacts was based on:
• operational data on fuel and energy consumption;
• data from GHG emission calculations;
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• the company’s development potential and the capacity of pulp and paper mills (current and planned for the
time horizon to 2030);
• analysis of energy costs as a significant factor affecting financial performance;
• identifying the regulatory risks associated with a possible reduction or change in the rules for the free
allocation of CO₂ emission allowances.
The analysis of climate risks was linked to the Group’s investment plans, including investments in renewable
energy sources (photovoltaic installations) and the modernisation of production assets as part of the
implementation of the “4P” Strategy.
In 2025, the Rottneros Group companies were included in the climate analysis, basing the analysis on the same
time horizon as for the Arctic Paper Group. In the Rottneros Group, one climate scenario below 4 C was
considered. In the Arctic Paper Group, on the other hand, two scenarios below 2 C and above 4C were considered.
[E1.IRO-1 21, AR 11d] The Arctic Paper Group did not conduct a full scenario analysis but considered two
extreme scenarios in its analysis of potential GHG emission and socio-economic development pathways: the
scenario with the highest transition risks (SSP1-2.6) and the scenario with the highest physical risks (SSP5-8.5).
This approach was intended to provide an insight into a broad spectrum of possible future paths.
The analysis of climate risks was therefore based on a scenario recommended by the regulations and
developed in line with current scientific knowledge by the IPCC: SSP5-8.5, which provides for the highest possible
physical climate risks, in line with the regulator’s intention to approach the assessment of risks as conservatively as
possible. Similarly, the process of analysing and qualitatively assessing transition risks was based on the regulatory
recommended scenario in line with the Paris Agreement developed with current scientific knowledge by the IPCC:
SSP1-2.6, which provides for the relatively highest possible transition risks, in line with the regulator’s intention to
approach the assessment of risks as conservatively as possible.
[E1.IRO-1 AR 15] These scenarios have served as a general basis to support the assessment of climate risks
and will be used in a more detailed and analytical manner in subsequent reporting cycles. The risk identification
and assessment process was integrated into the overall risk management processes, enabling the value of climate-
related transition risks to be compared with the other risks identified and assessed by the Group.
PHYSICAL RISKS
[E1.IRO-1 20 b] For physical climate-related risks, the Arctic Paper Group has identified the exposure areas of its
key assets taking into account their location and the occurrence of physical 28 climate-related risks identified in the
EU Taxonomy (Commission Delegated Regulation (EU) 2021/2139). Next, the vulnerability of assets and the
elements that support their operation (e.g. transport links, power lines) was analysed by examining the sensitivity of
these elements to physical events.
For climate-related risks, the Arctic Paper Group determined the nature of the effect and the scale of the
potential financial consequences based on subjective assessments by the undertaking’s experts. For the
quantitative analysis of physical risks, the magnitude of the financial effect of each risk was defined in terms of
financial thresholds, which are the inputs to the model for quantitative assessment of climate-related physical risks.
For the qualitative analysis of transition risks, the scale of the financial effect is determined in relation to the
predetermined financial impact ranges used to analyse all risks in the Group.
The likelihood assessment for the quantitative assessment of physical risks was based on conclusions drawn
from the analysis of a variety of sources: global climate change modelling results, historical data, empirical scientific
studies, official analyses and climate change adaptation strategies produced by authorities at various levels, and
queries on historical climate-related events in the immediate vicinity of the location under study. The extensive
review of information sources was intended to capture as accurately as possible the rationale for determining the
point likelihood of a hazard over the three time horizons. The point likelihood values served as inputs to a model for
quantifying climate-related physical risks.
[E1.IRO-1 AR 11 c] In the course of the analysis of climate-related physical risks, 106 potential physical risks
were analysed in detail and the presence of 3 risks assessed as high in the locations of key assets, the Arctic
Paper Group business processes or for the systemic dependencies that enable their operation was diagnosed.
Physical risks rated as high are:
• risk of damage to the roof and stored products/materials in the production hall in Kostrzyn due to flooding,
• risk of interruption to the operation/repair of the Kostrzyn production building due to flooding,
• the risk of repair costs due to damage, including flooding of the basement, lower warehouses and their
contents in the Kostrzyn warehouse due to flooding.
In 2025, as part of the analysis of climate-related physical risks for the Rottneros Group, 82 potential climate risks
were analysed, among which 2 risks were assessed as high in a time horizon of 1 to 15 years:
• risk of damage to non-replaceable machinery or parts of machinery as a result of heavy precipitation at
Vallviks Bruk AB,
• risk of damage to machinery and the production hall caused by flooding at Vallviks Bruk AB,
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The analysis identified the following climate-related risks as being significant over a time horizon of more than 5
years and up to 15 years:
• risk of damage to the roof and stored products/materials in the production building as a result of heavy
rainfall at Rottneros Bruk and Vallviks Bruk,
• risk of disruption to operations or temporary stoppage of production or storage buildings as a result of heavy
rainfall at Rottneros Bruk and Vallviks Bruk,
• risk of damage to non-replaceable machinery caused by heavy rainfall at Rottneros Bruk AB,
• risk of operational disruption or temporary closure of the Rottneros Bruk plant as a result of machinery
repairs caused by heavy rainfall,
• the risk of damage to production or storage buildings at Vallviks Bruk as a result of erosion caused by
flooding,
• risk of disruption to operations or temporary closure of buildings: production or storage as a result of flooding
at Vallviks Bruk,
• risk of disruption to the sewage treatment plant as a result of structural erosion caused by flooding.
TRANSITION RISKS
[E1.IRO-1 20 c, AR 12 a].
Transition risks were identified based on an analysis of the links between the Group’s key business areas and
climate-related transition events as classified by the Task Force on Climate-related Financial Disclosures (TCFD).
The TCFD classification in the process of identifying and analysing transition risks was adapted and developed
based on the current diagnosis of the Group’s regulatory, political, legal, technological, market and reputational
environment.
To assess transition risks, the Arctic Paper Group used the Company’s overall risk management policy and a
detailed procedure dedicated to climate-related risks. The risk identification and assessment process is integrated
into the overall company-wide risk management processes, enabling the value of climate-related transition risks to
be compared with other risks identified and assessed by Arctic Paper.
The determination of likelihood for transition risks is based on an analysis of trends and available data (such as
industry reports) and is expressed on the basis of the scale of risk likelihood ranges adopted in Arctic Paper’s
overall risk assessment procedure. The extensive review of information sources is intended to capture as
accurately as possible the rationale for establishing point likelihood of hazard occurrence over three time horizons
(1 year, 5 years, 10 years) and under two climate scenarios (SSP1-2.6; SSP5-8.5).
[E1.IRO-1 AR 11 c] As a result of the transition risks analysis, 22 potential transition risks were analysed in
terms of the various reasons for the materialisation of a given risk and several specific impacts of a given risk for
each of Arctic Paper’s individual business areas.
The transition risks rated as high are:
• the risk of rising raw material costs,
• the risk of a change in consumer purchasing preferences.
Details of the results of the materiality assessment are presented in the following subsection SBM-3 Material
sustainability impacts, risks and opportunities. Their implications and links to the strategy and business model are
described at the beginning of the relevant thematic chapter within this Statement. Unless otherwise specified,
material impacts, risks and opportunities apply to all Group locations as described in subsection SBM-1 Strategy,
business model and value chain.
G1 IRO-1 DESCRIPTION OF PROCESSES TO IDENTIFY AND ASSESS MATERIAL IMPACTS, RISKS AND OPPORTUNITIES
[G1 IRO-1 6] At the Arctic Paper Group, we see sustainability management as an integral part of business
management. We are committed to ensuring that the Group’s operations are performed in accordance with the
highest standards of conduct and legal regulations, providing transparent information. Identifying risks and
opportunities in the area of corporate governance enables them to be properly managed, responding to the real
needs of our stakeholders. The process for identifying impacts, including the assessment criteria used, is described
in section IRO-1 Description of the process used to identify and assess material impacts, risks and opportunities.
The double materiality analysis considered the entire Arctic Paper Group and all operational processes, including
primarily those related to paper and pulp production. material impacts, risks and opportunities related to direct and
indirect business relationships in the value chain (Europe, South America) are also considered.
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IRO-2 ESRS DISCLOSURE REQUIREMENTS COVERED BY THE UNDERTAKING’S SUSTAINABILITY STATEMENT
[IRO-2 56 AR 19] A list of the disclosure requirements applied is included in the annexes to this report.
[IRO-2 59] ESRS disclosures and data points were mapped to material impacts, risks, and opportunities in
accordance with the approach outlined in AR 16, and EFRAG guidance on the application of the ESRS was also
considered. The starting point for preparing the disclosure list was the result of the double-materiality analysis
(described in ESRS 2 IRO-1). The Group assigned significant data points to each of the relevant IROs and then
considered the wording of the transitional provisions. This assessment was qualitative in nature.
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SBM-3 Material impacts, risks and opportunities and their interaction with the strategy and with the business model
[SBM-3 48] [E4.. SBM-3 16] [E1.SBM-3 18, 19, AR 8b]
Table- Material sustainability impacts, risks and opportunities for the Arctic Paper Group
Type of IRO Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
ESRS E1 Climate change
Adaptation to climate change
Actual negative impact GHG: emissions increased energy consumption for the cooling process (servers, factory hall). ● ●
Risk – transitions Financial risk:
- increase in energy costs,
- the potential increase in the cost of maintaining operations,
- increase in the price of GHG emissions.
● ● ●
Climate change mitigation
Actual negative impact GHG emissions across the value chain, including:
- purchase and production of raw materials (synthetic fibres, pulp, chemicals),
- purchase of goods and services,
- transport, distribution,
- disposal of used disposable packaging.
● ● ● ●
Risk – transitions Reputation and market positioning risk – changes in customer preferences for products with lower carbon footprints and failure to align products
with customer expectations.
● ●
Risk – transitions Legal risk:
- extended emissions reporting obligations,
- the risk of incomplete or incorrect information,
- exposure to legal and administrative proceedings and possible financial penalties.
● ●
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Type of IRO Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Risk – physical High physical risk:
- an increase in extreme weather events, such as cyclones and floods, droughts and fires (e.g. in logging areas), which may aff ect the smooth
running of operations.
● ● ●
Risk – physical Chronic physical hazards. Possible disruption to own operations and increased costs caused:
- changes in rainfall distribution and extreme variability in weather conditions;
- increase in average temperatures;
- lowering of the groundwater level
● ●
Opportunity Competitive positioning for low-carbon products and services – climate change-conscious brand reputation. ● ● ●
Opportunity Access to new markets ● ● ●
Opportunity Efficient use of resources ● ●
Opportunity Reducing operating costs by improving energy efficiency ● ●
Power
Risk – transitions Technological/financial risks: costs of switching to lower emission technologies, failed investments in new technologies. ● ●
Opportunity Lower-energy costs – the potential to reduce energy costs in the long term (resulting from the development of low carbon energy sources). ● ●
ESRS E2 Pollution
Pollution of air
Actual negative impact Atmospheric pollution by compounds such as: SO ₂, NOx, N2O, particulate matter (PM), H₂S, ozone-depleting substances, CO, NH3, volatile
organic compounds (VOCs), benzene and other aromatic hydrocarbons released during the production process and the use of trans port vehicles
(value chain).
● ● ●
Water pollution
Actual negative impact Water pollution caused by maritime transport of the target. ● ●
Actual positive impact Supporting scientific projects on restoration, regeneration and transformation of ecosystems in cooperation with NGOs. ● ●
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Type of IRO Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Substances of concern
Actual negative impact Use of hazardous and potentially hazardous substances from the following hazard classes:
carcinogenicity category 1 and 2, reproductive toxicity category 2, respiratory sensitisation category 1, long -term aquatic hazard category 1, 2 and
3, specific target organ toxicity – single and repeated exposure category 1.
● ●
ESRS E3 Water and Water Resources
Water: Water consumption
Actual negative impact Water consumption within its own operations, especially in the production process (pulp and paper production). ● ●
Actual negative impact Water consumption in the supply chain – especially in areas with high water consumption. ● ●
Risk – physical Chronic physical hazards – droughts and rising temperatures can affect the availability of water resources for paper production or reduce the quality
of wood raw materials.
● ● ● ●
Water: Water withdrawal
Actual negative impact Transport of purchased pulp by sea – potentially includes ballast water intake. ● ● ●
Water: Water discharges
Actual negative impact Water discharges associated with paper and pulp production (including purchased pulp, excluding packaging). ● ● ●
Marine resources: Discharges of water into seas and oceans
Actual negative impact Water discharges into the seas and oceans. ● ● ●
ESRS E4 Biodiversity and ecosystems
Direct drivers of biodiversity loss: Climate change
Actual negative impact Indirect impacts on biodiversity loss and ecosystem health through operational emissions. ● ● ● ●
Direct drivers of biodiversity loss: Land use change, fresh water use change and sea use change
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Type of IRO Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Risk – transitions Legal and operational/financial risks related to compliance with regulatory requirements on due diligence and deforestation ( including EUDR). ● ● ●
Direct drivers of biodiversity loss: Direct use
Actual negative impact Direct impact on biodiversity loss – logging for pulp. ● ●
Actual positive impact Obtaining wood and pulp from certified suppliers and from sustainably managed forests. This is an activity that generates hig her costs. By choosing
to purchase certified raw material, the Arctic Paper Group has an impact on the entire value chain.
● ●
Risk – transitions Financial risk
- Increase in capital acquisition costs in case of environmental degradation and adverse impacts on biodiversity
- Penalties, damages, fines and civil proceedings related to adverse impacts on biodiversity
● ●
Direct drivers of biodiversity loss:. Invasive species
Actual negative impact Transport of pulp and products by sea – potentially includes ballast water intake with simultaneous transport of invasive species. ● ● ● ●
Impacts on the extent and condition of ecosystems
Actual negative impact Impact on soil degradation, desertification or soil sealing – impact mainly in the supply chain ● ●
Impacts on and dependence on ecosystem services
Actual negative impact Strong dependence of activities on ecosystem services – wood raw material as a basis for activities ● ●
Risk – transitions Financial/operational risk: Risk of raw material loss due to high dependence on ecosystem services (wood as the primary raw m aterial). ● ● ●
ESRS E5 Resource use and the circular economy
Resources introduced, including use of resources
Actual negative impact High reliance on non-renewable resources, including chemicals, wood and fossil fuel energy (33% of the company’s energy mix). ● ● ● ●
Discharged resources related to products and services
Actual negative impact There is a percentage of waste for disposal that cannot be reused or recycled. ● ● ●
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Type of IRO Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Actual positive impact Actions for the reuse of renewable raw materials. ● ●
Waste
Actual negative impact Production of disposable packaging for perishable products such as food (Rottneros packaging). ● ● ●
Actual negative impact The end product, i.e. the food packaging, usually ends up in a waste incinerator after use due to the packaging’s synthetic c oating and the
contamination caused by use.
● ●
Actual positive impact Circularity and its impact on product design. ● ●
ESRS S1 Own workforce
Working conditions: Job security
Actual positive impact Employees feel secure in the company: providing employees with a safe working environment, stable employment contracts, compe titive salaries. ● ●
Working conditions: Working time
Potential negative impact Potentially increased work outside standard working hours. Potentially more demanding and less beneficial for the employee ni ght shifts. ● ●
Actual positive impact We are one of the largest local employers. We do not work overtime, it occurs infrequently. Production employees work a three -shift system, which
ensures rotation and increases safety. Clerks are offered flexible working hours and the possibility of hybrid working.
● ●
Working conditions: Adequate wage
Actual positive impact Competitive remuneration, adequate to market rates and commensurate with the employee’s experience and education. ● ●
Working conditions: Social dialogue
Actual positive impact Engaging in dialogue with employees, involving them in the day -to-day operations and surveying their opinions on the company’s performance and
operations in the form of surveys, employee idea boxes, and employee satisfaction surveys. We try to translate th e conclusions of the research into
real action.
● ● ● ●
Working conditions: Work-life balance
Actual positive impact Caring for employees’ well-being (physical and mental), work-life balance. ● ●
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Type of IRO Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Working conditions: Occupational health and safety
Actual negative impact Accidents at work occur. ● ●
Actual positive impact High health and safety standards, health and safety system, emergency services (employees with emergency qualifications) ● ●
Equal treatment and equal opportunities: Gender equality and equal pay for work of equal value
Actual negative impact With few women in managerial positions, there are few opportunities for promotion. ● ●
Actual positive impact Gender equality and equal pay for equal work. ● ●
Equal treatment and equal opportunities: Training and skills development
Actual positive impact Employee training and skills development ● ●
Equal treatment and equal opportunities: Employment and integration of people with disabilities
Actual positive impact Favourable working conditions for people with disabilities ● ●
Equal treatment and equal opportunities: Measures to prevent violence and harassment in the workplace
Risk
(concerns all sub-topics “Equal treatment
and equal opportunities”)
Operational/financial risks:
Lack of appropriate competences in the organisation – resulting from the shortage of employees in the region: increased wage costs, incentives
and higher recruitment costs.
Staffing problems
- Low attractiveness of the company as an employer
- Losses due to absenteeism
- Increasing employee turnover (and thus increasing costs of recruiting and inducting new employees)
- Decrease in employee productivity
● ●
ESRS S2 Those working in the value chain
Working conditions: Job security
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Type of IRO Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Actual positive impact Value chain code of conduct: working to create a sustainable supply chain, auditing suppliers on environmental practices and respect for human
rights
● ●
Working conditions: Job security, Working time, Adequate pay, Social dialogue, Work -life balance, Health and safety at work.
Risk Operational risk – failure by suppliers to comply with legal requirements for employees in the value chain may result in the inability to supply raw
materials to the Group. Potential increase in costs and the need to find new suppliers – an issue of raw material availability.
● ●
ESRS S3 Affected Communities
Topic specific to the Arctic Paper Group
Actual negative impact Noise generation ● ●
Actual positive impact An important employer for the local community ● ●
ESRS S4 Consumers and end-users
Personal safety of consumers and/or end-users
Actual negative impact Adverse impact on the health of the products on offer (migration of hazardous substances, especially in oily and moist produc t packaging, where
migration is greater).
● ●
Information-related impacts on consumers or end-users
Opportunity Better alignment of offerings and expansion of customer base. ● ● ●
ESRS G1 Business conduct
Corporate culture
Actual positive impact Strong ethical culture of the company’s organisation, We are one of the largest local employers, we promote and share corpora te values among our
employees and community. We work with suppliers who represent the same values as us.
● ●
Topic specific to the Arctic Paper Group: Responsible marketing practices
Actual positive impact Promotion of environmentally friendly and ethically produced products. ● ● ●
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Type of IRO Material impact, risk or opportunity – Description
Upstream
Own operations
Downstream
Short horizon
Medium horizon
Long horizon
Place in the value
chain
Time horizon
Topic specific to the Arctic Paper Group
Actual positive impact An efficient system for reporting feedback and complaints. Surveying customers and taking their opinions into account. ● ●
Topic specific to the Arctic Paper Group
Opportunity Alignment with CSDD – Implemented actions may have an impact on ratings and potentially lower cost of raising capital in the future ● ●
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[SBM-3 48 g] As a result of the 2025 update of the double materiality analysis, the following changes have occurred:
Material topic and sub-topic Change in 2025 (relative to 2024)
E-1 Climate change
Climate change mitigation Positive impact non-material in 2025:
• Striving for zero emissions: investing in solutions that minimise the negative impact of
operations on the environment and climate, low carbon equipment
• Implementing more environmentally friendly means of transport and goods distribution
processes
Opportunity in 2025:
• Reducing operating costs by improving energy efficiency
Energy Positive impact non-material in 2025:
• Use of renewable energy sources, improvement of energy efficiency
Opportunity non-material in 2025:
• Resilience to physical threats – by identifying them and initiating mitigating actions
E-2 Pollution
Water pollution Negative impact non-material in 2025:
• Water contamination in the production process
Negative impact material in 2025:
• Water contamination caused by maritime transport of pulp
E-3 Water and Water Resources
Water: Water withdrawal Positive impact non-material in 2025:
• Actions in line with the European Green Deal (or other EU/global initiatives) on clean water
• Reuse of water that has already been used, whenever possible
Water: Water discharges Positive impact non-material in 2025:
• Create products and services that respect water resources and/or reduce water discharges;
improving water quality
E-4 Biodiversity and ecosystems
Direct drivers of biodiversity loss: Other Positive impact non-material in 2025:
• Supporting initiatives to promote biodiversity
Direct drivers of biodiversity loss:
Land use change, fresh water use change and sea use
change
Positive impact non-material in 2025:
• Measures to support the protection and restoration of biodiversity aligned, for example, with
the EU’s 2030 Biodiversity Strategy. Naturally clean water, advanced treatment processes
for contaminated water
Direct drivers of biodiversity loss: Direct use Actual negative impact in 2025:
• Direct impact on biodiversity loss – logging for pulp
Impacts on the extent and condition of ecosystems Positive impact non-material in 2025:
• Actions to support biodiversity conservation and restoration aligned, for example, with the
EU’s 2030 Biodiversity Strategy; Initiatives to support the conservation and restoration of
biodiversity (Kostrzyn, Swedish rivers)
• Positive impact on biodiversity – afforestation
E-5 Resource use and the circular economy
Discharged resources related to products and services Non-material risk in 2025:
• Regulatory risk – e.g., regulations regarding deforestation
Waste Positive impact non-material in 2025:
• Eliminate waste in the production process wherever possible (including in the production
phase, during use and at the end of the product life cycle) – producing as little waste as
possible
Actual negative impact in 2025:
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• The end product, i.e. the food packaging, usually ends up in a waste incinerator after use
due to the packaging’s synthetic coating and the contamination caused by use
S-1 Own workforce
Working conditions: Freedom of association, the existence of
works councils and workers’ rights to information,
consultation and participation
Positive impact non-material in 2025:
• There are trade unions, and European Works Council (at group level)
Working conditions: Collective bargaining, including
percentage of employees covered by collective agreements
Positive impact non-material in 2025:
• There are also agreements at company level.
Equal treatment and equal opportunities: Measures to
prevent violence and harassment in the workplace
Positive impact non-material in 2025:
The Group counteracts harassment and violence in the workplace by implementing policies
and providing anonymous channels for reporting misconduct.
Equal Treatment and Equal Opportunities: Diversity Positive impact non-material in 2025:
Nurturing diversity in the organisation by building diverse teams.
Working conditions: Working time Actual positive impact in 2025:
We are one of the largest local employers. We do not work overtime, it occurs infrequently.
Production employees work a three-shift system, which ensures rotation and increases
safety. Clerks are offered flexible working hours and the possibility of hybrid working.
S-2 Employees in the supply chain
Working conditions: Job security Positive impact non-material in 2025:
Educating suppliers on ESG issues by implementing surveys and sharing the Code of
Conduct in the value chain
S-3 Affected communities
Other Positive impact non-material in 2025:
Supporting charitable initiatives important to the local community, helping those in need and
marginalised people
Economic, Social and Cultural Rights of Communities: Water
and Sanitation
Positive impact non-material in 2025:
Cleaning up the river so the local community can enjoy it – fishing and other recreational
activities
Civil and political rights of communities: Freedom of
expression
Positive impact non-material in 2025:
Consultation with the local community on matters affecting it
S-4 Consumers and end-users
Personal safety of consumers and/or end-users Actual negative impact in 2025:
Adverse impact on the health of the products on offer (migration of hazardous substances,
especially in oily and moist product packaging, where migration is greater)
Information-related impacts on consumers or end-users Opportunity in 2025:
Better alignment of offerings and expansion of customer base
G1 – Business conduct
Protection of whistleblowers Positive impact non-material in 2025:
An effective whistleblowing and whistleblower protection system in the value chain (not in its
own operations)
Supplier relationship management, including payment
practices
Positive impact non-material in 2025:
There is a Code of Conduct in the value chain, no arrears to suppliers
Corruption and bribery: Prevention and detection, including
training, Incidents
Positive impact non-material in 2025:
Staff training on the value chain code of conduct, internal payment authorisation procedures,
anti-corruption policy, increasing positive impact and ESG opportunities
Other Positive impact non-material in 2025:
ESG management; High transparency (e.g. through reporting)
Opportunity material in 2025:
Compliance with CSDDD - implemented actions may have an impact on ratings and
potentially lower costs of raising capital in the future.
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Topic specific to the Arctic Paper Group Actual positive impact in 2025:
An efficient system for reporting feedback and complaints. Surveying customers and taking
their opinions into account
Topic specific to the Arctic Paper Group: Responsible
marketing practices
Actual positive impact in 2025:
Promotion of environmentally friendly and ethically produced products
Some of the sub-topics were changed, which was due to, among other things:
• Revising the double materiality assessment, including the stakeholder survey and updating the catalogue of
material impacts, risks and opportunities, as well as from changing the materiality threshold for actual
positive impacts from 30% to 50%;
• Some of the positive impacts identified in 2024 were actions to mitigate adverse impacts.
Some positive impacts, due to regulatory change, are legal obligations and therefore should not be considered as
positive impacts.
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2. ENVIRONMENT-RELATED INFORMATION.
ESRS E1 Climate change
SBM-3 Linking material sustainability impacts, risks and opportunities to the strategy and business model
[SBM-3 48b, c, d, f] Material climate change impacts, risks and opportunities are closely aligned with the Arctic
Paper Group’s strategy and business model, in particular through the Energy Pillar, which focuses on developing
RES, improving energy efficiency and reducing GHG emissions in the organisation’s operations and value chain.
An increase in average temperatures can increase energy demand, especially for cooling processes, which affects
emissions and operating costs and forces a redefinition of the resilience of the business model in a low-carbon
direction. The energy transition generates transition risks, including rising energy and commodity prices and tighter
emissions and reporting regulations, leading to increased operating and investment costs. Investments in RES,
long-term energy contracts and innovative emission-reducing technologies strengthen the resilience of the
business model, despite the increase in capital expenditure, and contribute to lower energy costs in the long term.
material physical risks, such as extreme weather events, rising temperatures and lowering groundwater levels, can
disrupt production, transport and the supply chain. Resilience analyses, infrastructure upgrades and supplier
diversification are the answer to these threats. Emissions associated with manufacturing and supply chain activities
influence the need to work with business partners ensuring environmentally sustainable business operations.
Changes in customer preferences and growing awareness in the context of climate change present a risk of
reduced demand, but at the same time create an opportunity to develop sales of premium paper and sustainable
packaging, in line with the Pillars Paper, Packaging and Pulp. Taken as a whole, climate change is both a financial
and operational challenge for AP as well as an impetus to transform its business model towards a more resilient
and competitive one.
[E1.SBM-3 19, AR 6, 7, 7b, 7c]
In 2025, the Arctic Paper Group conducted an analysis of the resilience of the Strategy to risks arising from
climate change. The resilience analysis was based on linking actions arising from the Arctic Paper Group’s “4P”
Strategy to identified climate risks. Each initiative resulting from the strategy was assessed in terms of exposure to
material physical risks and transitions in the perspective of adequate and regulatory-required climate scenarios:
SSP1-2.6 and SSP5-8.5 to cover the widest possible spectrum of potential risks and opportunities. The resilience
of each initiative to specific risks in the short term (1 year), medium term (5 years) and long term (10 years) was
then considered.
In its analysis, the Arctic Paper Group considered its own operations, production buildings, warehouses, office
buildings, indoor and outdoor workers, machinery, servers, regional and global transport links, electricity supply,
water supply, wastewater treatment plants, heat supply, Group-owned solar farms. To the best of its knowledge,
the Group has not excluded from the analysis, any material physical risks or transitions.
During the analysis, the Group made assumptions in line with the SSP1-2.6 scenario reflecting an ambitious
decarbonisation path both globally and locally. In line with the indicated scenario, rapid electrification, regulatory
and economic pressure on the energy efficiency of production processes and reliance on renewable energy were
assumed. These assumptions are reflected in the Group’s existing practices and planned strategic actions in the
form of increasing the energy efficiency of machinery and production processes, water efficiency and sourcing
renewable energy from its own production. The decarbonisation targets developed as part of the decarbonisation
strategy were developed in accordance with the guidelines of the Science Based Targets initiative. The reduction
targets adopted are in line with the Paris Agreement for the relevant emission bands (band 1, band 2 and band 3).
Details of the objectives are included in subsection E1-4 Mitigation objectives.
The estimated expected financial impact from material physical and transition risks was determined in
accordance with the risk assessment methodology used in the Group and the ERM system as a whole in a
qualitative form by assigning a rating based on predefined financial impact ranges. The estimation of the financial
impact of the risks was based on the value of the assets analysed, which could be destroyed, and the costs of
slowing down or stopping production and business processes in the form of falling revenues, rising operating costs,
rising insurance prices or rising capital costs. Related mitigation actions are described below in subsection E1-3
Actions and resources in relation to climate issue management.
Based on the results obtained, the level of resilience was determined for each initiative according to the
following thresholds: very high, high, moderate and low resilience. The analysis showed that the resilience of the
“4P” Strategy in each of the four pillars (Energy, Packaging, Paper, Pulp) against the physical risks associated with
climate change is generally high, with one area of risk rated as moderate: the risk of operational disruption or
production stoppage due to heavy rainfall or flooding.
In the case of the strategy’s resilience against transition risks, there was more variation across the strategy
pillars. For the Paper and Pulp pillars, the resilience of the strategy was assessed as high and moderate in relation
to two transition risks: rising raw material costs and a shift in consumer purchasing preferences. Pillar Packaging
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has demonstrated a high degree of resilience to both risks. In the case of the Energy pillar, the resilience of the
strategy was classified as moderate against the risk of rising raw material costs and very high for changes in
customer purchasing preferences. The analysis indicates resilience in the face of transition risks, although some
areas may require more monitoring and adaptation actions.
[E1.SBM-3, AR 8]
The Arctic Paper Group sees the main area of uncertainty associated with the resilience analysis as not
knowing which climate scenario will ultimately materialise. The Group plans its strategy in a resilient way, i.e. in
such a way that it creates the conditions for business success for the Group, regardless of which scenario
materialises. At the same time, through consistent monitoring of the regulatory, market and climate environment,
cyclical updates of the risk assessment and resilience analysis, the Group assumes that early signals of the
materialisation of any of the scenarios considered will be caught and that further optimisation of the strategy will be
carried out under conditions of reduced uncertainty.
The physical risks that have been identified as significant for the Group – the risk of flooding in Kostrzyn – have
a long potential horizon of materialisation (10 years). Therefore, in response to the effects of the risk in the form of
damage to buildings, stored products and materials, as well as the associated costs of interrupting operations to
carry out repairs to the production building and the costs of repairs, the Group anticipates taking action in the
medium term to select the optimal adaptation strategy and reduce this risk to an acceptable level.
The conclusions for the strategy resulting from the identified material transition risks: the increase in the cost of
materials and changes in consumer preferences require further analysis and quantification on the Group’s part. The
conclusions of the analyses and selected actions based on these conclusions will be incorporated into the Group’s
updated strategy to ensure continued access to finance at an affordable cost of capital, the ability to redeploy,
modernise or decommission existing assets, change the product and service portfolio and retrain employees where
necessary. Actions dedicated to correcting or adapting the Arctic Paper Group’s strategy and business model to
climate change in the short, medium and long term are a task foreseen for the next few years.
E1-1 Climate change mitigation transition plan
[E1-1 14, 17, AR 1] The Arctic Paper Group has not adopted a Transition Plan for climate change mitigation in
2025. The Group is in the process of developing the Plan and aims to adopt it by 2028. The element that supports
the Group in gradually building the Transition Plan is the Decarbonisation Strategy adopted in 2025, which sets
reduction targets for Scope 1, 2 and 3 GHG emissions. The objectives arising from the adopted strategy are
described in section E1-4 Mitigation objectives.
E1-2 Policies related to climate change mitigation and adaptation
[E1-2 24, 25] [MDR-P 65 a] In 2025, the Arctic Paper Group did not have a separate Policy related to climate
change mitigation and adaptation but plans to adopt one by the end of 2026. Currently, the most important
documents governing the approach to climate change mitigation and adaptation are The Arctic Paper Group’s “4P”
Strategy 2022-2030 (adopted in September 2021 and updated in 2023) and Arctic Paper Group’s Decarbonisation
Strategy (developed in December 2025). These documents also refer to areas related to energy efficiency and the
use of renewable energy in the Group.
As part of the “4P” Strategy, the Arctic Paper Group is committed to, among other things, working to mitigate
climate change by providing products and solutions based on energy and renewable materials, while replacing
plastics.
As part of the Decarbonisation Strategy, the Arctic Paper Group commits to reduce GHG emissions by 42% in
Scope 1 and 2 and by 25% in selected Scope 3 categories by 2030, as further described in section E1-4 Mitigation
targets. The strategy also sets out a number of operational initiatives for the Group’s value chain to help it achieve
its ambitious decarbonisation targets.
Another document that indirectly regulates the approach to climate change is also the Arctic Paper Group Value
Chain Code of Conduct, described under ESRS 2 GOV-4 and G1-1. The document commits the production
facilities to operate in accordance with the ISO 14001 and EMAS environmental management system, and the
Grycksbo and Munkedal mills additionally to have an ISO 50001 certified energy management system. In addition,
according to the Code, Group employees are required to:
• familiarise yourself with the Sustainability Policy (described below),
• act in accordance with the Sustainability Policy, with applicable environmental standards (laws,
environmental management system obligations); to manage and conscientiously document information on
our environmental impact in accordance with legal requirements
• ensure that the relevant environmental permits are in place,
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• to put forward ideas for improvements in production processes, use of raw materials that contribute to the
Group’s wider contribution to environmental protection,
• monitor the use of resources e.g. energy, water, chemicals materials and adjusting their use to improve
efficiency,
• minimise business travel, using online meeting platforms.
The Arctic Paper Group, in its Sustainability Policy, clearly states that reducing its climate impact is a priority for the
organisation. The Policy’s provisions also refer to the analysis and management of climate change risks, the
monitoring of GHG emissions and the implementation of solutions to reduce them. The Group also declares its
commitment to reducing GHG emissions across the supply chain. In addition, the Environmental Policy indicates
that at every stage of the process, from the purchase of raw materials for production through to quality
development, marketing and distribution to end customers, the overriding objective must be, among other things, to
have the least possible adverse impact on the climate.
[E1-2 24, 25] [MDR-P 65] The scope of the Strategies and Policies described above covers the entire Arctic
Paper Group’s operations, and the Group’s Management Board is responsible for implementing the provisions of
the regulations. The adopted Climate Change Policies do not refer to third party standards or initiatives. In
preparing the content of the documents, the Arctic Paper Group took into account the opinions and interests of the
Group’s stakeholders. The Group makes the regulations available by posting them on its website and on the
internal communication channels of each organisational unit.
In the Rottneros Group, climate change issues are described directly in Sustainable Development Policy. In the
document, the Group indicates that it attaches great importance to reducing its environmental impact, with the aim
of operating in a sustainable manner in the long term. In addition, Policy has been implemented in the Rottneros
Group, which identifies the use and production of renewable energy as an objective. With regard to energy
consumption, an analogous approach applies to the choice of energy sources. The desire to reduce energy
consumption in both the production and use of the Group’s products is indicated. Energy and environmental targets
are regularly monitored in conjunction with financial reporting, and stakeholders are consulted on the impact of
business activities and products on the environment and energy consumption.
The scope of the aforementioned Policies covers the entire activities of the Rottneros Group, and the
Management Board of Rottneros is responsible for implementing the provisions of the regulations. The adopted
Climate Change Policies do not refer to third party standards or initiatives. In preparing the content of the Policies,
the Rottneros Group took into account the opinions and interests of the Group’s stakeholders. The Group makes
the regulations available by posting them on the website and on the internal communication channels of each
organisational unit.
E1-3 Actions and resources in relation to managing climate issues
[E1-3 28, 29a] [MDR-A 68] Key activities related to climate issues focus at Arctic Paper Group on reducing GHG
emissions and improving the energy efficiency of its processes:
Name of the action Description of the action
Conclusion of PPAs,
acquisition of guarantees of
origin
At Rottneros, part of the electricity demand was covered by a long -term wind PPA in 2025, which is an important part of the
efforts to decarbonise the energy mix. In addition, in order to ensure that the remaining electricity consumption is covered, the
Company acquired guarantees of origin for non-fossil electricity in 2025. The use of these instruments makes it possible to
increase the share of renewable energy in the Rottneros factory’s electricity consumption. These actions contribute to
reducing Scope 2 GHG emissions and the carbon footprint of operations.
Installation of photovoltaic
panels
As part of its decarbonisation efforts, the Arctic Paper Group is investing in renewable energy sources by installing and
expanding photovoltaic installations at selected locations. PV installations commissioned in 2024 at the Grycksbo plant
provided additional electricity production of around 350 MWh in 2025, contributing to a reduction in the need for electricity
from conventional sources. In parallel, the photovoltaic installation at the Kostrzyn plant was expanded by an additional 9
MWh in 2025, significantly increasing the share of renewable energy in the Company’s energy mix. The ongoing investments
in photovoltaics support the reduction of Scope 2 GHG emissions and contribute to the diversification of energy sources and
increased energy efficiency. These actions strengthen the Group’s operational resilience to energy price volatility and are an
important part of a long-term decarbonisation strategy.
Increasing the energy
flexibility of the plant and
supporting the stability of the
electricity system
In 2024, the installation of electricity storage in the form of a battery system was realised at Rottneros as part of efforts to
increase the efficiency of energy management. This solution has enabled better balancing of electricity production and
consumption, including renewable energy, and reduced energy losses. The 8 MW energy storage facility was actively used in
the wholesale energy markets and to provide services to the Swedish transmission system operator in 2025. In addition, the
plant temporarily reduced pulp production during periods of high electricity prices, increasing the elasticity of demand. These
actions bring economic benefits to the company, support the stability of the national electricity system and indirectly
contribute to the reduction of Scope 2 GHG emissions.
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Name of the action Description of the action
Installation of vehicle
charging stations
As part of its efforts to support the reduction of emissions from mobile combustion, the Arctic Paper Group is developing
electric vehicle charging infrastructure at selected locations. In 2025, a project to expand the electric car charging networ k by
installing an additional charger was completed at the Munkedals factory, bringing the number of charging points to two and
enabling the operation of electric company cars. In parallel, two electric vehicle charging stations have been installed at
Rottneros, extending the availability of infrastructure for fleet users. The development of charging infrastructure is an
important element in supporting the progressive electrification of the fleet and the reduction of GHG emissions in Scope 1.
These actions also favour optimising energy consumption and increasing the use of electricity, including energy from
renewable sources.
Expansion and optimisation
of the compressed air system
At the Kostrzyn factory, an expansion of the compressed air system was realised through the installation and commissioning
of a ZR700 variable speed compressor as part of actions to improve the energy efficiency of production processes. In
parallel, the exchanger in the cooling system was verified to ensure optimal operation of the compressor and dryer. The
solutions used enable the system operation to be better matched to actual compressed air demand. According to the energy
analysis carried out, the expected effect of the project is a reduction in electricity consumption of approx. 6.4 MWh per week,
which translates into a reduction in indirect emissions of 2.
Implementation of LED
lighting
As part of its efforts to improve energy efficiency, the Arctic Paper Group is implementing projects to replace traditional
lighting with energy-efficient LED solutions at selected locations. At the Kostrzyn plant, LED lighting was installed with control
automation, including a system for regulating operation based on sunrise and sunset, and limiting the illumination of the
railway siding during nighttime hours when shunting work is not taking place. The solutions used optimise energy
consumption and translate into an expected reduction in electricity consumption of 25.16 MWh per year. At the Munkedals
factory, the replacement of old lighting with LED technology has continued into 2025, achieving savings of 18.77 MWh per
year to date, with the calculations also taking into account projects started in earlier years and completed in 2025. The project
remains ongoing and the results to date are as intended and have been determined by comparing energy consumption
before and after implementation. In parallel, lighting retrofitting work continues at Rottneros in 2025, supporting further
reductions in energy consumption and indirect emissions in Scope 2.
Planned actions
Construction of bio-pellet
production
An investment is underway at Arctic Paper Grycksbo to build a bio pellet plant as part of efforts to decarbonise energy
processes. The new facility is scheduled to be operational in spring 2026 and will enable increased use of renewable fuels in
place of fossil fuels. The investment will contribute to reducing Scope 1 GHG emissions and improving the efficiency of raw
material and energy use in operations.
Low-carbon maritime
transport in the supply chain
A new vessel for the transportation of pulp and wood has been contracted at the Vallviks pulp mill and will begin operations in
the summer of 2026. The vessel will be equipped with a hybrid propulsion system, enabling it to reduce CO2 emissions by
around 50% compared to the conventional vessels used to date. This investment will contribute to a significant reduction in
greenhouse gas emissions associated with maritime transport. The action supports the achievement of the reduction targ ets
for 3 and the transformation of maritime logistics towards more sustainable solutions.
Hydrogen land transport in
the supply chain
At the Vallviks pulp mill, it is planned to implement a low-carbon transport solution using a hydrogen-powered truck to
transport pulp to customers within Sweden and to ports. The project is scheduled to commence operation in November 2026.
This initiative aims to reduce Scope 3 GHG emissions by reducing emissions associated with road transport and supporting
the transition towards zero-emission logistics technologies.
Energy recuperation for the
paper machine
At the Kostrzyn mill, an energy recuperation project is planned for paper machine no. 2 (MP2), aimed at reducing energy
consumption and noise in the production process. A conceptual phase including an assessment of the potential for energy
and environmental savings with the calculation of the energy effect has been completed. At the same time, a request for
proposals was sent out for the development of the detailed design, with the aim of phasing the investment and spreading the
capital expenditure over at least three years. The planned actions will improve energy efficiency and comfort in the production
area.
Preparation for the
construction of an electrode
boiler
In 2025, preparatory work for the electrode boiler project was carried out at the Kostrzyn plant, including contacts with
technology manufacturers, reference visits and discussions with potential contractors. In 2026, the plan is to select a
contractor, sign the contract and start the project. The project aims to increase the share of electricity in process heat
generation and reduce emissions associated with the use of fossil fuels. The project is scheduled for completion in the
second half of 2027.
Decarbonisation of purchased
process steam by changing
the fuel mix of the supplier
The Munkedals plant covers around 75 per cent of its energy needs with process steam supplied by an external CHP plant, of
which Arctic Paper is the only steam customer. This supplier is planning to change its fuel mix (switching to biogenic fuels) at
Arctic Paper’s initiative due to the Group’s commitments to reduce its carbon footprint. Arctic Paper will contribute to the cost s
of changing the fuel mix, enabling a gradual increase in the share of biogenic fuels to 95% by the end of the first quarter o f
2027. This action will significantly reduce indirect GHG emissions associated with the purchase of steam.
[E1-3 29 b] The Group did not analyse the expected or achieved reductions in GHG emissions that result from
the implementation of the above actions.
[E1-3 29 b, c, AR 21, 22] [MDR-A 69 a, b] The activities of the Kostrzyn factory concerning the expansion of the
photovoltaic installation and the expansion of the compressed air system through the installation and
commissioning of a ZR700 variable speed compressor required expenditure of approx. PLN 22 million. The
remaining activities do not involve the need for significant capital or operational expenditure during the reporting
period.
The planned activities with regard to the management of climate issues are described in part above. Other
planned activities and the resources needed to implement them are currently being developed as part of the
Transition Plan.
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E1-4 Mitigation targets
[E1-4 32] [MDR-T 80] In 2025, the Arctic Paper Group adopted a comprehensive Decarbonisation Strategy,
covering all three GHG scopes. The strategy sets quantitative targets for the Arctic Paper Group’s climate change
mitigation until 2030, with 2024 as the adopted base year. GHG emissions calculations for the base year were
based on the GHG Protocol methodology. The decarbonisation strategy has been developed in line with the
Science Based Targets initiative (SBTi) guidelines for setting GHG reduction targets. The reduction targets adopted
are in line with the Paris Agreement for the relevant emission bands (band 1, band 2 and band 3). Details of
targets, emission scopes and time horizons are provided in the following sections of the disclosure.
In the base year, direct emissions (scope 1) amounted to 133 ktCO2e. Their main source was the combustion of
fuels in stationary sources, such as boilers for the generation of electricity and heat and steam, with smaller
contributions from combustion in mobile sources and refrigerant leaks. Indirect energy-related emissions (scope 2),
calculated according to the market-based method, amounted to approx. 153 ktCO2e and included emissions from
the purchase of electricity and process steam. Together, Scope 1 and Scope 2 emissions accounted for approx.
24% of the Group’s total emissions in the base year.
Scope 3 emissions, related to the value chain, reached approx. 834 ktCO2e (including non-material categories)
and accounted for approx. 74.5 % of the Group’s total emissions. Key sources of emissions in this area include
purchased goods and services and the processing of sold products, as well as energy-related activities, upstream
transport and distribution, end-of-life processing of sold products.
Figure 1 – GHG emission reductions in scope 1 and 2 by 2030
As part of its Decarbonisation Strategy, the Arctic Paper Group commits to reduce absolute GHG emissions,
expressed in carbon dioxide equivalent, in Scopes 1 and 2 by 42% by 2030 (taking 2024 as the base year). The
proposed target is in line with the scenario of limiting temperature increase to 1.5°C resulting from the Paris
Agreement and the requirements of the SBTi initiative for setting targets for Scope 1 and 2 emissions.
The choice of 2030 as the target year reflects the shortest possible implementation horizon while maintaining a
reduction ambition level of 42%. Achieving the 42% reduction target for Bands 1 and 2 by 2030 requires an
absolute reduction of 120,107 tCO2e, which will translate into a target for Bands 1 and 2 of 165,862 tCO2e in 2030.
Due to the significant share of emissions from stationary combustion (45.9%) and purchased electricity (38.9%)
in the total Scope 1 and 2 emissions, decarbonisation actions will primarily focus on reducing emissions from these
sources. The main levers for implementing the Decarbonisation Strategy in this area will be to increase the share of
renewable electricity through the purchase of green electricity in selected organisational units, the purchase of
process steam with a lower carbon footprint (generated using biofuels) and the reduction in fossil fuel consumption
resulting from the partial replacement of existing installations with lower carbon solutions.
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Figure 2 – Reduction in Scope 3 GHG emissions by 2030
For selected Scope 3 categories, the Arctic Paper Group commits to reduce absolute GHG emissions expressed in
carbon dioxide equivalent by 25% by 2030 (taking 2024 as the base year). The proposed target is in line with the
‘below 2°C’ scenario of the Paris Agreement and the requirements of the SBTi initiative for setting Scope 3 targets.
The scope of the target includes the following Scope 3 categories along with their contribution to total Scope 3
emissions1:
• Category 1: Purchased goods and services (38.2%),
• Category 3: Category 3: Fuel and energy-related activities (8%).
• Category 4: Upstream transport and distribution (12.4%),
• Category 12: End of life of products sold (9.4%),
Together, the categories listed account for 68% of Scope 3 emissions, meeting the 67% coverage threshold of the
SBTi guidelines.
In the base year 2024, total Scope 3 emissions amounted to 834,469 tCO2e, of which 566,879 tCO2e fell into
the reduction target categories. Achieving the 25% reduction target in the selected categories by 2030 requires an
absolute reduction of 141,720 tCO2e, which will translate into a Scope 3 emissions target of 425,159 tCO2e in 2030
within the targeted categories.
The main levers for decarbonisation in Scope 3 are actions aimed at decarbonising the supply chain, including
proactively engaging suppliers by monitoring their GHG emissions and progress in implementing decarbonisation
actions, in order to support more informed decisions on supplier selection. The organisation plans to maintain an
active dialogue with transport and distribution service providers on the use of more sustainable forms of transport
and, where possible, the implementation and contracting of routes with lower emission potential compared to fossil
fuel-based solutions.
The Arctic Paper Group’s decarbonisation goals have been set to address and manage the significant impacts,
risks and opportunities associated with climate change (as listed earlier in Table SBM-3 Material Impacts, Risks
and Opportunities for Sustainable Development), including in particular the significant negative actual impacts
associated with GHG emissions across the entire value chain. Progress in achieving decarbonisation goals is
monitored and reported on an annual basis using quantitative measures such as greenhouse gas emissions and
the degree of achievement of the adopted goals. Monitoring covers Scope 1, Scope 2 and Scope 3 GHG
emissions. The process of monitoring, analysing performance and reporting progress is the responsibility of the
Sustainability team, which reports the results to the Group Board.
Decarbonization targets have been defined for 1) Scope 1 and 2, and 2) selected Scope 3 categories
(categories 1, 3, 4, and 12). Therefore, the key measures of progress are the percentage changes in GHG
emissions (tCO2e) in these scopes/categories relative to emissions generated in the base year (2024). Due to the
significantly greater availability of actual data and operational control in Scope 1 and 2, as well as the inclusion of a
significant portion of emissions in the EU ETS, monitoring actual changes in GHG emissions is not subject to
significant limitations. Calculations of Scope 1 and 2 emissions, and therefore their changes, are based primarily on
data on fuel, heat, and electricity consumption, which are reliably monitored due to the production nature of the
Group's operations.
Key limitations relate to monitoring emissions, and therefore their changes, in Scope 3. Beyond category 3
related to the acquisition of fuels and energy, the accuracy of emission calculations in the remaining categories is
1 Shares refer to non-FLAG band 3, i.e. band 3 excluding FLAG emissions occurring in category 1 of band 3
S
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strongly dependent on the availability of supplier data, particularly data on the carbon footprint of the products and
services provided (categories 1 and 4). The Group has taken active steps to increase the share of supplier data in
the calculations, particularly in the area of purchased chemical raw materials and pulp (category 1). Monitoring
changes in category 12 is based primarily on updated statistical data on the treatment of paper waste at the end of
its life cycle.
The calculations and GHG reduction targets for Scopes 1, 2 and 3 have not been verified by an independent
third party other than the assurance provider.
E1-5 Energy consumption and the energy mix
[MDR-M 77 a] Energy is a core component of the Arctic Paper Group’s business, conditioning the continuity and
efficiency of production processes across all facilities. The level and structure of energy consumption are important
from both a cost and environmental perspective, affecting the Group’s GHG emissions and operational
competitiveness.
Below is a summary of the Arctic Paper Group’s energy consumption as a basis for assessing energy efficiency
and identifying areas for further optimisation. Included in this consumption are fuels used in the production process
(including biomass such as wood bark, black liquor, methanol, natural gas, LNG, etc.), electricity from purchase
and from the company’s own renewable energy installations (photovoltaic installations and hydroelectric power
plant), used for production and infrastructure maintenance, steam used in production and transport fuels.
Compared to 2024, the report does not include energy consumption in leased offices or vehicles used by sales
offices. In 2024, this represented less than 0.1% of the Group's total energy consumption and included estimated
data, so the decision was made to exclude it from the report. This exclusion does not affect the overall picture of
the Group's energy consumption or the ability to compare key trends year-on-year. In connection with the reporting
of emissions under the European Emissions Trading Scheme (EU ETS), the calculation of emissions from EU ETS
installations and the input data used are subject to external verification.
In cases where the base unit was other than MWh, energy consumption was recalculated using calorific values.
These values were obtained from the emission factor databases used in the GHG emission calculations (e.g.
databases of the Swedish Environmental Protection Agency (version 2025), the National Balancing and Emission
Management Centre (KOBIZE), DEFRA (2025). Calorific values specific to the supplier were also used.
The breakdown of the electricity consumed into renewable, nuclear and fossil sources was made using the
structure of the electricity generated specific to the supplier in the case of so-called ‘green tariffs’. When Group
entities did not purchase electricity under the green tariff, the source-specific structure of electricity not covered by
guarantees of origin or other credible instruments (the so-called residual mix) was used. The structure data was
obtained from the European Residual Mixes 2024 study published by the Association of Issuing Bodies and the
Swedish Energy Markets Inspectorate (Nordic Mix).
Following the ESRS guidelines, the Arctic Paper Group adopts a conservative way of differentiating between
renewable and non-renewable energy sources. Energy is only classified as renewable or nuclear if its origin is
clearly stated in contracts with suppliers. If the energy source is uncertain, it is classified as being from fossil fuels.
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Energy consumption and the energy mix Unit 2025 2024 2025/2024
1) Fuel consumption from coal and coal products MWh 0 0 0
2) Fuel consumption from oil and petroleum products MWh 22 051.89 31 094.40 -29.1%
3) Fuel consumption from natural gas MWh 587 526.63 567 241.73 3.6%
4) Consumption of fuel from other fossil sources MWh 0 0 0
5) Consumption of purchased or procured electricity, heat, steam and cooling from fossil
sources
MWh 317 732.09 369 705.68 -14.1%
6) Total fossil energy consumption (calculated as the sum of lines 1 -5) MWh 927 310.61 968 041.81 -4.2%
Share of fossil sources in total energy consumption (%) % 28.96% 31.10% -6.9%
7) Energy consumption from nuclear sources MWh 243 867.33 195 951.01 24.5%
Share of energy consumption from nuclear sources in total energy consumption (%) % 7.62% 6.30% 21%
8) Fuel consumption for renewable sources, including biomass (which also includes
industrial and municipal bio-waste, biogas, renewable hydrogen, etc.)
MWh 1 813 991.66 1 715 107.99 5.8%
9) Consumption of purchased or procured electricity, heat, steam and cooling from
renewable sources
MWh 185 210.71 224 703.50 -17.6%
10) Self-produced renewable energy consumption without fuel MWh 31 274.50 8 853.12 253.3%
11) Total renewable and low-carbon energy consumption (calculated as the sum of lines
8-10)
MWh 2 030 476.87 1 948 664.61 4.2%
Share of renewable sources in total energy consumption % 63.42% 62.60% 1.3%
Total energy consumption (calculated as the sum of lines 6, 7 and 11) MWh 3 201 654.81 3 112 657.44 2.9%
[E1-5 42, 43] 100% of the Arctic Paper Group’s activities fall within the sector with a material climate impact –
NACE 17 (production of pulp, paper and board), therefore the Group’s total sales as reported in the financial
statements – PLN 3,197,594,000 – are used to determine energy intensity (according to the item Revenue from
sales of paper and pulp – Note 4.1.1.).
Energy intensity Unit 2025 2024 2025/2024
Total energy consumption associated with activities in sectors with a material
climate impact
MWh 3 201 654.81 3 112 657.44 2.9%
Energy intensity resulting from activities in sectors with material climate impacts
climate (total energy consumption per net revenue)
MWh/PLN thousand 1,0013 0,9062 10.5%
[MDR-T 77 b] The above indicators have not been verified by an external body other than the assurance provider.
E1-6 Gross scope 1, 2 3 and Total GHG emissions.
[E1-6 47, AR 39b] The following section contains the results of the Arctic Paper Group’s greenhouse gas (GHG)
inventory and shows the total emissions associated with the Group’s operations in the current reporting year. The
emissions, measured in tonnes of carbon dioxide equivalent (tCO2e), were calculated according to the international
Greenhouse Gas Protocol methodology. Key guidelines used in the calculations include the GHG Protocol (2004
version), GHG Protocol Scope 2 Guidance (2015 version), Corporate Value Chain (Scope 3) Accounting and
Reporting Standard (2011 version) and Scope 3 Calculation Guidance (2013 version).
The Group has operational and financial control over the entities in its structure, leading to full consolidation of
Scope 1, Scope 2 and Scope 3 emissions in the Group’s GHG inventory. The data used to calculate GHG
emissions was sourced from the Group’s internal records and was provided by employees from across the
organisation.
The following entities were excluded from the Scope 1 and 2 GHG emissions inventories: Arctic Paper Polska
Sp. z o.o., Arctic Paper Deutschland GmbH, Arctic Paper UK Limited, Arctic Paper Sverige AB, Arctic Paper
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Benelux S.A., Arctic Paper Norge AS, Arctic Paper Baltic States SIA, Arctic Paper Danmark A/S, Arctic Paper
France SAS, Arctic Paper Schweiz AG, Arctic Paper Italia srl, and Arctic Paper Espana SL. These entities are
trading companies that have not experienced significant operational or organizational changes. In the base year
(FY2024), they generated a total of 165.71 tCO₂e, out of the Group's total Scope 1 and 2 emissions (market-based
approach) of 285,968.77 tCO₂e. The share of these entities in Scope 1 and 2 emissions was 0.06%, which is
significantly below the exemption threshold (5%).
Scope 1 applies to all direct GHG emissions from sources owned or controlled by companies within the Group.
This category includes emissions from mobile combustion sources, including transport fuels such as diesel and
gasoline, and combustion in stationary sources of fuels such as natural gas, LPG, LNG, fuel oil and industry-
specific fuels such as black liquor, methanol, wood bark or tar oil. In addition, Scope 1 also includes emissions
associated with refrigerant replenishment. Emissions were calculated on the basis of real liquid and solid fuel
consumption (also including biofuel) using emission factors obtained from, among others, the Swedish
Environmental Protection Agency (version 2025), the UK DEFRA (2025), the National Balancing and Emissions
Management Centre (KOBIZE, version for 2024 and 2025) and information from suppliers.
For activities covered by the European Emissions Trading Scheme (EU ETS), Scope 1 emissions are calculated
in accordance with the EU ETS methodology. Several entities within the Group report their CO2 emissions
according to the EU ETS. These are: Arctic Paper Kostrzyn S.A., Arctic Paper Munkedals AB, Arctic Paper
Grycksbo AB, Rottneros Bruk AB, Vallviks Bruk AB. In connection with the reporting of emissions under the
European Emissions Trading Scheme (EU ETS), the calculation of emissions from EU ETS installations and the
input data used are subject to external verification.
Scope 2 includes indirect GHG emissions associated with the consumption of purchased electricity and steam.
The Group uses both a market-based and a location-based approach, in line with the GHG Protocol Scope 2
Guidance, to ensure a comprehensive assessment of the emissions associated with the purchase of energy that is
classified as renewable or nuclear only when its origin is explicitly stated in contracts with suppliers. If the energy
source is uncertain, it is classified as being from fossil fuels. Selected Arctic Paper Group entities purchase
electricity, under so-called green tariffs (60.1%), guarantees of origin of energy from renewable sources (0.4%) and
guarantees of origin from nuclear sources (17.2%). Emissions were calculated based on real electricity and heat
consumption. Emission factors were obtained through, among others, the UK DEFRA (2025), the National
Balancing and Emissions Management Centre (KOBIZE, version for 2024 and 2025, the Swedish Environmental
Protection Agency (version 2025) and from information from suppliers and were calculated based on real electricity
and heat consumption.
[E1-6 AR 46 h] Scope 3 emissions include all indirect emissions outside of Scope 1 and 2 that occur throughout
the Group’s value chain. Emissions in material categories arise from a variety of sources, including the purchase of
goods and services, capital goods, energy and fuel activities not included in Scope 1 or 2, transport and distribution
(upstream), processing of sold intermediates and the management of waste arising from sold products at end-of-
life.
The following entities were excluded from the Scope 3 greenhouse gas emissions inventory: Arctic Paper
Polska Sp. z o.o., Arctic Paper Deutschland GmbH, Arctic Paper UK Limited, Arctic Paper Sverige AB, Arctic Paper
Benelux S.A., Arctic Paper Norge AS, Arctic Paper Baltic States SIA, Arctic Paper Danmark A/S, Arctic Paper
France SAS, Arctic Paper Schweiz AG, Arctic Paper Italia srl, Arctic Paper Espana SL, Arctic Paper
Mochenwangen GmbH, Arctic Power AB (formerly Munkedals Kraft AB), Kalltorp Kraft Hb, Arctic Paper S.A.
Sverige filial. There were no significant operational or organizational changes to these entities. In the base year
(FY2024), they generated a total of 663.49 tCO2e of the Group's total Scope 3 emissions (market-based approach)
of 889,241.47 tCO2e. Their share of Scope 3 emissions was 0.07%, which falls significantly short of the 5%
exemption threshold.
[E1-6 AR 46 g] Emissions were calculated on the basis of real consumption expressed in physical units such as
tonnes, litres, MWh where such data were available and on an expenditure basis, in the corresponding currency.
Estimates of the calculations were mainly made for categories 10 and 12 (Processing sold products and
Processing sold products at end-of-life, respectively), where the most likely uses and disposals of the products sold
by the Group were modelled, using employee expertise and available studies. Emission estimates were also made
in Category 4, Upstream Transport and Distribution, where, in the absence of accurate data on routes travelled, the
distance was estimated based on the distance from the production facility to a central point in the country or from
the specific location of the supplier. 48.7% of the Scope 3 emissions have been calculated from the estimated
inputs and are mainly related to the estimation of categories 10 and 12. Calculations for categories 10 and 12 are
based entirely on estimates. The only actual data used in the calculations is the mass of products sold. 19% of
emissions were calculated based on primary data, i.e., data obtained directly from suppliers and business partners.
Supplier-specific emission factors were assumed as primary data. Emission factors were obtained through, among
others, the Swedish Environmental Protection Agency (version 2025), the National Balancing and Emissions
Management Centre (KOBIZE, version 2024 and 2025), the Association of Issuing Bodies (AiB, version 2024), the
European Environment Agency (EEA, version 2024) and the UK DEFRA (2025). In addition, the Group uses
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emission factors from the International Energy Agency (IEA, version 2025), Exiobase (version 3.8.2) and Ecoinvent
(version 3.11) databases and, where possible, supplier-specific emission factors.
[E1-6 AR 46 i] Certain Scope 3 categories are not material due to the nature of the Group’s business. Include
downstream transport and distribution, leased downstream assets and franchises (no activity matching the
classification criteria for these categories). In the methodology for calculating GHG emissions, 5% of total
emissions was used as the materiality threshold. The materiality analysis of scope 3 showed, according to the
calculations in the base year (FY2024), that the following scope 3 categories are below the materiality threshold:
category 2 Capital goods, category 5 Waste generated from operations, category 6 Business travel, category 7
Employee commuting, category 8 Leased senior assets, category 11 Use of products sold and category 15
Investments. The categories considered material are, in turn, category 1 Purchased goods and services, category 3
Fuel and energy activities (not included in scope 1 or 2), category 4 Upstream transport and distribution, category
10 Processing of products sold, category12 End-of-life processing of products sold.
[E1-6 AR 39 b] Where possible, the Group’s emissions calculations consider the full spectrum of greenhouse
gases, including carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and trifluoride nitride (NF3). Due to data limitations, some
sources of emission factors only provide aggregate emissions in CO2 equivalent (CO2e), rather than a detailed
breakdown of individual gases (e.g. location-based indicator for electricity (KOBIZE).
To ensure accuracy, the Group’s GHG emissions calculations are based on emission factors from a number of
recognised sources. These include the Swedish Environmental Protection Agency (version 2025), the National
Balancing and Emissions Management Centre (KOBIZE, version 2024 and 2025), the Association of Issuing
Bodies (AiB, version 2024), the European Environment Agency (EEA, version 2024) and the UK’s DEFRA (2025).
In addition, the Group uses emission factors from the International Energy Agency (IEA, version 2025), Exiobase
(version 3.8.2) and Ecoinvent (version 3.11) databases and, where possible, supplier-specific emission factors.
GHG emissions calculations are based on Global Warming Potential (GWP) values from the IPCC Sixth
Assessment Report (AR6, 2021). However, when using the DEFRA database, GWP values from AR5 are used due
to the fact that DEFRA does not provide values for all indicators broken down by individual greenhouse gas.
Conversions to AR6 were not carried out for DEFRA-related emission factors due to data limitations.
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GHG emissions 2025 2024 – after
recalculation (base
year)
2024 before
recalculation
% 2025/2024 after
recalculation
Reduction goal
2030
% Goal/ base year
Scope 1 GHG emissions
Gross Scope 1 (t CO2e) 135 306.18 133 442.79 133 442.79 1.4% N/A N/A
Percentage of Scope 1 GHG
emissions from regulated
emissions trading schemes (%)
92.2% 92.4% 92.4% -0.2% N/A N/A
Scope 2 GHG emissions
Scope 2 by location-based
method (t CO2e)
48 170.38 45 939.28 45 939.28 4.9% N/A N/A
Scope 2 by market-based method
(t CO2e)
88 289.18 152 525.98 152 525.98 -42.1% N/A N/A
Scope 3 GHG emissions
Gross scope 3 by location-based
method (t CO2e)
776 163.65 795 056.07 849 828.72 -2.4% N/A N/A
Scope 3 gross by market-based
method (t CO2e)
789 779.49 829 986.35 884 759.00 -4.8% N/A N/A
1 Purchased goods and services
(t CO2e)
294 680.96 318 414.62 373 187.27 -7.5% N/A N/A
2 Capital goods (t CO2e) 18 393.39 24 262.31 24 262.31 -24.2% N/A N/A
3 Fuel and energy-related
activities (not included in scope 1
or 2) by location-based
30 341.62 31 652.39 31 652.39 -4.1% N/A N/A
3 Fuel and energy activities (not
included in scope 1 or 2) by
market-based method (t CO2e)
43 957.45 66 582.67 66 582.67 -34.0% N/A N/A
4 Upstream transport and
distribution (t CO2e)
111 191.64 103 422.44 103 422.44 7.5% N/A N/A
10 Processing of products sold (t
CO2e)
246 630.52 238 844.88 238 844.88 3.3% N/A N/A
12 End-of-life processing of
products sold (tCO2e)
74 925.53 78 459.43 78 459.43 -4.5% N/A N/A
Total GHG emissions
Total GHG emissions by location-
based method (t CO2e)
959 640.22 974 438.14 1 029 210.79 -1.5% N/A N/A
Total GHG emissions under the
market-based method (t CO2e)
1 013 374.85 1 115 955.12 1 170 727.77 -9.2% N/A N/A
The Scope 3 greenhouse gas emissions data presented for 2024 reflects a change in the emissions calculation
methodology, which involves the use of a more precise calcium carbonate emissions factor that better reflects the
calcium carbonate production process. This change affected the reported emissions in the base year. Because the
use of the more precise factor resulted in a change in Scope 3 emissions of more than 5%, emissions for the base
year were recalculated to ensure data comparability. The emission values presented in this disclosure for 2024
represent recalculated data and are consistent with the Group's current greenhouse gas emissions calculation
methodology. The change in methodology is described in BP-2. In 2025, total greenhouse gas emissions using the
market-based approach amounted to 1 013 374,85 tCO2e, a decrease by over 9% compared to the base year of
2024. Scope 1 and 2 emissions decreased by over 21% compared to the base year, reaching 223 595,36 tCO2e.
The Arctic Paper Group's 2030 Scope 1 and 2 target is to reduce emissions using the market-based approach by
42% by 2030, compared to 2024. Therefore, a significant portion of the Scope 1 and 2 decarbonization target was
achieved in 2025. This significant reduction is primarily related to changes in the structure of purchased electricity
sources, which is reflected in the over 42% decrease in Scope 2 emissions calculated using the market-based
approach. In 2025, Vallviks Bruk and Rottneros Bruk covered a portion of their purchased electricity with nuclear
guarantees. Significant reductions in Scope 3 emissions were recorded in Category 3, which is related to the
acquisition of purchased electricity, heat, and fuels (so-called upstream emissions). Compared to the base year,
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MANAGEMENT BOARD’S REPORT FOR 2025
OF ARCTIC PAPER SA
106
Scope 3 emissions decreased by 34%. This is directly related to activities related to purchasing Scope 2 electricity
– reducing Scope 2 emissions directly leads to a reduction in Scope 3 emissions. Over 7% reduction in emissions
compared to the base year was recorded in Category 1, which is related to purchased products and services,
primarily raw materials used in production (technological chemicals, pulp, wood). This is related to suppliers'
decarbonization efforts and reducing the carbon footprint of their products. The Group’s Scope 3 decarbonisation
targets are to reduce emissions in categories 1, 3, 4, and 12 by 25% by 2030 compared to the base year of 2024.
Emissions in the categories covered by the decarbonisation target amounted to 524 755,58 tCO2e, representing
over 7% decrease compared to the base year.
GHG intensity Unit 2025 2024 2025/2024
Total GHG emissions by
location-based method per net
revenue
t CO2e/PLN thousand 0.3001 0.3009 -0.3%
Total GHG emissions by
market-based method per net
revenue
t CO2e/PLN thousand 0.3169 0.3422 -7,4%
[E1-6 55] The Group’s total sales as reported in the financial statements – PLN 3 197 594 000 (as per Paper and
Pulp Sales Revenue – Note 4.1.1) were used to determine the GHG intensity.
[E1-6 AR 43 c, 45 e, 46 j] Biogenic emissions are disclosed separately, as ‘out-of-range’ emissions, as the
combustion of bioenergy sources is considered carbon neutral throughout their life cycle. This classification is
based on the assumption that biomass absorbs during the growth phase an equivalent amount of CO2 released
during combustion. However, non-CO2 GHG emissions from biomass combustion, including methane (CH4) and
nitrous oxide (N2O), are covered under Scope 1, according to ESRS E1 (AR 43). In 2025, biogenic Scope 1
emissions amounted to 635 742.00 tCO2e, of which almost 100% came from combustion in stationary sources.
Biogenic Scope 2 emissions amounted to 25,655.36 tCO2e and were associated with purchased process steam.
Biogenic Scope 3 emissions amounted to 139,496.22 tCO2e and were associated with the use of sold biofuels.
E1-7 GHG removal and mitigation projects financed through carbon credits
The Arctic Paper Group had no GHG capture and storage projects in 2025.
E1-8 Internal carbon pricing
The Arctic Paper Group did not use internal carbon pricing in 2025 and did not assign a specific financial value to
its CO2 emissions as part of its decision-making processes.
E1-9 Projected financial impacts from material physical and transition risks and potential climate-related
opportunities
The Arctic Paper Group benefits from the possibility to omit the information set out in ESRS E1-9 in the first three
years of the Sustainability Statement on the basis of the “List of phased-in disclosure requirements” (Appendix C in
ESRS 1) and the Commission Delegated Regulation (EU) 2025/1416 of 11 July 2025 amending Delegated
Regulation (EU) 2023/2772 as regards the deferral of the start date of application of the disclosure requirements for
certain companies (“Quick fix”).
ESRS E2 Pollution
SBM-3 Linking Material sustainability impacts to strategy and business model
[SBM-3 48b, c, d, f] The material impacts described in relation to pollution are primarily due to the specific nature of
the Arctic Paper Group’s production and logistics activities, and are linked to a business model based on
production and distribution. Production processes affect air pollution, water pollution and toxic emissions into the
air, water and soil. Atmospheric pollution from production and transport processes affects the level of investment
and the setting of strategic objectives. Potential water pollution in production processes does not currently affect
the change in the business model, due to the investments made in water purification and recycling technologies,
the optimisation of production processes and the implementation of environmental management standards. Arctic
Paper conducts continuous monitoring of the quality of water discharged into the environment and plans to
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